Technical Analysis: The Bounce Goes Nowhere

The rally attempt hasn’t gotten very far, which is a sign of potential weakness. However, there also hasn’t been any technical damage yet, so we’ll call the picture neutral at the moment. 1020-1022 and 1010 on the S&P (first chart below) look like good first levels for indicating direction. Levels to watch on the Nasdaq (second chart) are 1840 and 1812-1814 to the downside, and 1860 and 1888 to the upside. If the Dow (fourth chart) heads down, it will break an uptrend line. Support is 9352-9361, and 9500 and 9610 are resistance. Over the last couple of weeks, the Dow and S&P could be forming bull flags, so a strong move up could be the start of something. Finally, we’ll keep posting the chart of the banks (fourth chart) until it makes a break; based solely on the developing chart patterns, the picture is bearish.

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