Technical Analysis: Ugly Candlesticks

Today’s candlesticks were ugly across the board, bearish dark cloud cover almost everywhere you look. On the plus side, the internals were very strong for a down day, with new highs rising on both exchanges and stable advance-declines and upside/downside volume. About the only negative in internals is that new lows crept up a little, but not enough to cause major concern just yet. Sentiment, of course, remains another picture entirely. Today’s .64 close on the equity put-call ratio was another sign of complacency. Investors may need some fear put back into them before the rally can advance significantly from here. The Nasdaq (first chart below) ran into resistance just under 2000, and barely hung onto 1967-1971 support at the close. 1950, 1938-1940 and 1915-1920 are next supports. The S&P and Dow (second and third charts) continue to form bearish rising wedges off the late September lows. The S&P has major resistance at 1062-1070, and 1046-1050 and 1035-1040 are support. The Dow (third chart) has resistance at 9900-9925, and support is 9750-9773 and 9700.

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