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Stocks Find Support off Lows; NASDAQ Holds Its 200 Day Moving Average

Stocks were hit hard from the onset, even leaders found themselves being sold.  Ben Bernanke was testifying on the hill while traders were dumping stocks.  Selling accelerated as the day wore on but were able to find footing prior to lunch time.  Stocks then were hit hard after 2pm hitting new lows but support was able to come in.  Stocks once again were able to avoid a nasty distribution day if the NASDAQ had gone out on its lows.  This market is once again proving there is an underlying bid to the market.

Two key levels were held today and an important moving average.  The NASDAQ was able to hold 1750 which happens to be its 200 day moving average while the S&P500 was able to hold a psychological level of 900.   Holding the 200dma is very important level for the NASDAQ as it appears we might be able to produce consolidation above this moving average.  It would be a very bullish sign for the NASDAQ to consolidate at this level.  Same is to be said about the S&P500 and the 900 level as consolidation above 900 would label it a support level.  It is a wait and see game but so far we are seeing bullish action.

Some leading stocks were hit hard in the morning hours, but patience was rewarded as many found support.  Leading stocks will always get support in a relatively strong uptrend.  Remember, we are coming off lows that were well over 50% of the highs.  That kind of damage will ruin many stocks.  Another bullish sign is our leading stocks finding support.

One ratio to highlight here is the number of new highs 71 that were hit today while only 12 new lows were observed.  New highs are continuing its winning streak by dominating new lows.  This ratio must be taken into consideration, remember we have rebounded from an incredible downturn and  the expectation to see a massive amount of new highs is unrealistic.  Pay attention to the actual ratio and it is showing a bullish tint to this market.

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