Technical Analysis: The Banks Break Out

It’s been one heck of an expiry week, that’s for sure. The first sign that today was going to be a good day was the banks (first chart below), which gapped above resistance while the rest of the market was still red. That negates any bearish pattern that was forming on that index. So how high can the market go? There’s a whole lot of resistance coming up on the Nasdaq (second chart, 1940-2000), the S&P (third chart, 1052), and the Dow (fourth chart, everything from here to 10,008, the 61.8% retrace of the all-time high. Support is now 1900 and 1888 on the Nasdaq, 1032-1034.5 on the S&P, and 9610 on the Dow. The equity put-call ratio continues to flirt with the .45 danger zone, but has yet to close under that level. Volume was solid today, but upside volume was mediocre on the NYSE and Nasdaq. The market is once again very overbought, but that hasn’t led to much more than a breather for some time. All in all, amazing strength considering it’s the weakest time of year historically.

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