It wasn’t pretty, but the Dow, S&P and Nasdaq all managed to hold support today.
The S&P (first chart below) held on better than the other indexes, forming a rising channel at today’s low of 1261. That line is at 1262 and rising for tomorrow. If that goes, 1256-1257 is next, with 1247 and 1234 below that. To the upside, 1283, 1288, 1292, 1304, 1313 and 1328 are big levels.
The Dow (second chart) just barely held the same support level, at 11,330 and rising, with 11,221 and 11,125 below that. To the upside, 11,542, 11,600, 11,640, 11,750, 11,867 and 11,960 are all resistance.
The Nasdaq (third chart) is just barely holding its uptrend line here. Much lower and 2343-2350 could come into play. 2423 and 2475-2500 are tough upside hurdles for the bulls.
On the sentiment front, we’ll note one negative here: Investors Intelligence bulls-bears are now at 40-38, up from 30-50 bulls-bears three weeks ago, and on not much of a move for the indexes. An indicator to keep an eye on. Historically, tops have occurred at around 60% bulls, but the 45% level was good enough for a brutal sell-off from May until mid-July this year.
And lastly, a peek at oil and the dollar (charts four and five): oil is finding support above its 200-day average, while the dollar could run into headwinds at 78-80.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.
