Technical Analysis: Support Erodes

The negatives today were numerous despite the okay performance of the indexes: continued deterioration in new highs on both exchanges, poor upside volume and leadership, and what may be the lowest equity put-call ratio reading since August 2000 (.357). If not for today being expiry, that last one would really be cause for concern. Another day or two down for the Nasdaq could give an intermediate term sell signal for that exchange, according to a new indicator we are tracking, but the NYSE may be some time from confirming that signal. The Nasdaq (first chart below) has support at 1633, 1620-1625 and then 1599-1600. A decline that stops at 1599 could form a “flat” wave 4 correction in Elliott wave terms, setting up a final wave 5 run to new highs. A break of that level – and 1160 on the NDX – would add more evidence to the case for an intermediate term top. Resistance is 1660 and 1680. The S&P (second chart) has support at 993, 988, 972-977 and 960-963. Resistance is 1002-1004.6 and 1015. The Dow (third chart) has support at 9150, 9053, 9000 and 8931, and resistance at 9250 and 9352.

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