The S&P 500 (first chart below) is testing the neckline of its recent head and shoulders top in the 870-875 range, a common occurrence before a downtrend resumes. The Dow (second chart) is still some distance from a good test, which would take place in the 8200-8275 range. Support on the S&P is 844 and 839.50, and 7950 and 7902.60 on the Dow. The Dow intraday chart (third chart) could be forming a bearish broadening pattern; similar patterns are developing in the S&P and Nasdaq. Speaking of the Nasdaq, there’s no question where critical support is there: 1320. The index faces stiff resistance in this area, at 1365-1370 and 1377. The equity-only put-call ratio rose to .64 today, an improvement for once, but the recent low readings suggests that we may need higher readings at .80 or above to get a lasting bounce. Fourth quarter GDP will be reported tomorrow morning; expectations are for a 0.9% gain.
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