It was just a couple of weeks ago that the the major indices broke to new multi year highs and were at least in position for a sizable, sustained move up from there.  After today’s move, that optimism has faded as the market again finds itself up against a wall.  Just a wall of worry?  A temporary pitstop before breaking to new multi year highs once again? Perhaps.  But with key support levels being threatened, now is not the time to be making large bets in either direction.  Leadership in commodities which are at sitting at lofty levels?  I’d much rather see strength in tech and medicals, which have been anything but strong.  Tomorrow will be an important day.  Let’s take a look at the charts.

The Nasdaq is the strongest of the major indices and still hovers above significant support where the upward trend line and the 50 day moving average converge around 2300, but the emerging weakness in telecom and networking (see my post at ETF Central) is a concern.

The Dow sits right at key support where the upward trend and 50 day moving average converge.  It wouldn’t be surprising to see the market continue with downward momentum at the open tomorrow, but its how it closes that’s important.  Another high volume move below this key support level tomorrow would be significant and signal further selling in the coming weeks.

The weakes of the major indices is the S&P, which will have to muster some significant strength in a hurry to avoid a meltdown.  You can see that it has already taken out support of the upward trend line and is barely hanging on to support of the 50 day moving average as sell volume picked up significantly today.  There is minor support at 1275, but another high volume move down tomorrow would most likely signal a move to 1250 in the coming weeks.