Technical Analysis: Stocks Head Higher

The market remains overbought heading into earnings season, suggesting the possibility of a pullback. While price has certainly been behaving itself, suggesting the possibility of higher prices, we should point out that the indexes all may be forming bearish broadening patterns on the daily charts (see charts below). Those upper trendlines are also at some pretty major resistance levels, most notably 1940 on the Nasdaq and 1050 on the S&P. The rally could get to new highs – and then finally see its first significant correction. 1914 is first resistance on the Nasdaq, and 1860 is support. 1040 is first resistance on the S&P, and 1029, 1022 and 1015 are support. On the Dow, 9500 and 9350 are support, and 9686 and 9750 are resistance.

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