Stocks edged themselves higher today with gains ranging between 0.2% and 0.4% on the DJIA (DIA), S&P 500 (SPY), and Nasdaq Composite (QQQQ). Market breadth leaned towards the positive side but participation did not indicate investors were accumulating shares heavily. Market sector action was mild as well with only the consumer staples and industrials outperforming the major indexes. Health care was the only sector to finish in negative territory. Keeping with the trend we are raising both the support and resistance levels on the DJIA, S&P 500, and Nasdaq Composite (see below). As we mentioned last night the next challenge for the indices are their 21-day moving averages. Intra-day only the S&P 500 tested its 21-day moving average at 1,345 but closed below it to 1,344. The DJIA and Nasdaq Composite never tested their respective 21-day moving averages intra-day. If the major indexes are unable to hold their 21-day and 50-day moving averages then the market could see some stronger selling. Keep in mind the S&P 500 and Nasdaq Composite have yet to fill the gaps they created in mid-April at 1,310 and 2,740, respectively. At some point they will need to fill these gaps to true up the chart patterns. After closing above it yesterday the Semiconductor Index (SOX) fell below its 50-day moving average today and lagged the overall market with a 0.9% decline.
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