The Dow and S&P (first two charts below) continue to consolidate at the lows after 900- and 90-point declines, respectively. If that first leg down is duplicated, the targets become 7250 on the Dow and 780 on the S&P – just above the October lows. 7902.6 and 839.50 are the critical support levels; with the second straight day of distribution on the NYSE, those supports are in danger. Resistance is 8158 and 8200-8250 on the Dow and 860-875 on the S&P. The Nasdaq (third chart) continues to cling to 1300 support; if that goes, 1263-1273 is next. 1320 and 1332-1335 are resistance. The equity-only put-call ratio continues to be affected by massive paired trades in 2005 QQQ puts, so we’ll have to do our best to guess what the real level is until those trades cease. Based on what traded on the CBOE the last two days, we’d have to peg Monday’s equity PC ratio at .62 and Tuesday’s at .75, but that’s a rough guess. Today’s may have been around .60; we’ll know tomorrow, when the CBOE reports most actives.
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