btdstocksblog's  Instablog

After reversing heavy losses in yesterday's session stocks spent most of today in positive territory as the DJIA (DIA), S&P 500 (SPY), and Nasdaq Composite (QQQQ) each gained at least 0.7% led by materials and energy shares. For now the major indexes are finding support at their respective 50-day moving averages. Most sectors performed well today with only the utility sector declining indicating both the risk and defensive trade was on today. Market breadth was positive today and the Semiconductor Index (SOX) led the major indexes rising 1.9% and reclaimed its 50-day moving average. The downside to today's session was participation was not very strong indicating investors were not buying stocks heavily. However, based on the action we are raising the support/resistance levels on the S&P 500 and Nasdaq Composite (see below). For the DJIA we are raising its support level but leaving its resistance level the same (see below). Before the indices can try to recapture their 21-day moving averages at 12,623, 1,344, 2,832 for the DJIA, S&P 500, and Nasdaq Composite they will need to overtake their current resistance levels which are below their 21-day moving averages. Investor complacency remains at high levels even with the action in many individual stocks acting poorly. More importantly with the stock market direction range bound investors have remained mostly bullish on stocks. Fewer stocks are making new highs and the ratio of new highs to new lows has been declining in recent sessions.


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