Technical Analysis: Shock Attack

A rough day for stocks today. The indexes pulled back deeper than we’d like to see, but the S&P and Dow (first two charts below) remain well above their recent downtrend lines, a positive. It could have been nothing more than forced liquidation by hedge funds with a little panic thrown in; if that’s the case, the indexes should rebound shortly, but they are facing a lot of economic headwinds here. 1158 is a critical support level on the S&P, and resistance is 1175-1180. The Dow has support at 10,250-10,263 and 10,175, and resistance is 10,360-10,400. The Nasdaq (third chart) has support at 1957-1960 and 1950, and resistance is 1174-1180, 1187-1193 and 2005.