It was a real battle at resistance levels today with the market swinging back and forth all day. But eventually the bears won out as volume picked up on the sell side. Today’s distribution at resistance sets up the possibility of retesting support levels of this most recent correction. I happen to disagree with IBD’s assessment of a new rally confirmation last Wednesday. Yes, technically there was confirmation, but its still too soon to declare a new rally. While the market has firmed a bit, selling volume still dominates and major resistance looms. Until a breakout occurs above keys resistance levels I’m taking a very cautious approach on the long side.<\/p>\n
Today the Nasdaq hit the wall at the 50 day moving average. Today’s move sets up more weakness in the short term with a possibility of retesting the lows of this correction around 2050. The 200 day moving average is also an area to watch, but has been an insignificant source of support and resistance.<\/p>\n
The S&P has been lagging the Nasdaq of late. It looked as if it might break above resistance at 1200 today, but failed after lunch. It’s a significant move and sets up further weakness in the coming days, with a possibility of retesting the area around 1175. Look for a trend change if it does. Light volume selling would indicate a market that is increasingly getting stronger and set up a move for a stronger run at resistance.<\/p>\n<\/p>\n
The Dow is the weakest of the indices and has much work to do if it hopes to make a run at Dow 11,000 by the end of the year, especially considering it couldn’t handle the first level of resistance at 10,400 today. If it can clear 10,400 it will still face stiff resistance around 10500 and again at 10700, before tackling the the mother of all resistance – (insert drum beats and glowing lights here) -Dow 11,000. Note that selling continues to dominate.<\/p>\n
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It was a real battle at resistance levels today with the market swinging back and forth all day. But eventually the bears won out as volume picked up on the sell side. Today’s distribution at resistance sets up the possibility of retesting support levels of this most recent correction. I happen to disagree with IBD’s … Continue reading Distribution @ Resistance<\/span>