No change from a week ago: The Dow (first chart below) remains stuck just below its February high. If it can close at 12,743.2 or higher, it would confirm the Transports’ (second chart) close above its February high and generate a Dow Theory bull signal, reversing November’s bear signal and suggesting that the worst of the credit crunch is behind us.
On the plus side, by consolidating at the top of last week’s big up day, the index could be setting up for more upside. Levels to watch are 12,767 to the upside and 12,527 to the downside, the upper and lower boundaries of that consolidation.
The S&P (third chart) faces resistance between here and 1406, and support is 1358 and 1340.
The Nasdaq (fourth chart) faces resistance between 2390 and 2419, and 1340 and 1300 are support.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.