Index Strat Risk Target DJIA [B]Flat[/B] NASDAQ [B]Flat[/B] S&P500 [B]Flat[/B]
The decline from the October 2007 high is in 5 waves, therefore a multi-month countertrend 3 wave advance is underway. Fibonacci resistance does not begin until 8736. Near term structure is not clear, which is not a surprise given that the advance is a correction. The rally from 6470 could unfold as a complex correction, such as a series of zigzags. If things clear up, then there may be a buying opportunity.
The Dow has started to consolidate just below resistance at the 61.8% Fibo level of the 9,088 – 647 decline. We could see a test of the technical level today and a break above there would leave the January 6th high of 9,088 as the next target. However, if bearish sentiment returns then it could lead to a test of the March 30th low of 7,437 with 7,750 as possible support beforehand.
The S&P count is the same as the Dow count. A corrective advance is expected and initial resistance from Fibonacci begins at 926. Near term structure is not clear enough to warrant a trade.
The S&P 500 has started to consolidate above the 61.8% Fibo level of the 875-666 decline. A move higher could lead to a test of resistance at 875-the February 9th high. If bearish momentum continues we could see a test of support at 815 where we see former congestion.
The Nasdaq is in the same position as the other US indexes. The rally from the low (1264) is expected to eventually reach Fibonacci resistance, which does not begin until 1727.
The Nasdaq found support at former resistance at the February 10th high of 1,598. The tech laden index may look to re-test the January 6th high of 1,666 which could now form staunch resistance for the tech laden index and lead to sideways trading over the short-term.