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Brett's Stock Market Pulse ( Wednesday, May 25, 2011 (Nasdaq Closes Gap-Indexes Flirt With Resistance Levels But Close Below Them)

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), SPY
Stocks had another session where they traded up and down however today in contrast to yesterday's session they held on to finish higher in the middle of their intra-day trading range. Market breadth was generally positive but with the Nasdaq Composite (QQQQ) being the leader in today's session more money seemed to be going into the NYSE than the Nasdaq. The Nasdaq Composite was able to trade down intra-day and close the gap it created in mid-April at 2,740 before closing higher. The S&P 500 (NYSEARCA:SPY) came within two points of closing its gap at 1,310 reaching a low of 1,312 in today's session. Some late day buying had stocks at their highs for the day during the last hour of trading but by the close they backed off the highs. The DJIA (DJIA) recaptured its 50-day moving average intra-day but closed below it and the S&P 500 almost traded up to its 50-day moving average intra-day. The Nasdaq Composite never flirted with its 50-day moving average. The three indexes remain below their 21-day and 50-day moving averages. The adjustments to the support/resistance levels for the DJIA, S&P 500, and Nasdaq Composite is mixed based on today's stock market direction action. Support is the same on the DJIA/Nasdaq Composite and up on the S&P 500. Resistance is the same on the S&P 500/Nasdaq Composite and slightly higher on the DJIA. Overall, the indices for a good portion of the afternoon traded near their resistance levels. In the last hour they made a push to trade above them but finished below them. In May the Volatility Index (VIX) has flirted three times to move above its 50-day moving average but each time it ran into resistance and then proceeded to move down and find support at its 21-day moving average. The chart could be indicating a big move is about to occur in the market. Possible a big increase in market volatility.

No positions in securities mentioned.