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Looks like yesterday's rally threw markets into more prolonged sideways trading ranges, rather than take them another leg down. The boundaries for a breakout remain unchanged from before; just a second band of resistance (a new neckline) was added at November highs to create a double/triple(?) bottom with yesterday's low and the late (and early) October low(s). It's still anyone's game with the Summation Indices favouring bulls and the Bullish Percents aligning with bears. You can see in the Dow chart how neckline resistance is the same whether you looked at this as a head-and-shoulder pattern or a triple bottom. Yesterday's momentum should see it challenge 9,615 For the Nasdaq, angled resistance is key: The S&P is a bit of a hybrid: Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

No stone was left unturned during Wednesday's rout. The head-and-shoulder pattern discussed in my earlier posts is a cooked goose. Now it's a question as to whether October lows will hold as support? For now, the best case scenario for the S&P is a sideways pattern to help digest the losses. Neckline resistance remains unchanged from before, so the conditions required for a breakout are the same as for the head-and-shoulder reversal pattern. The Summation Indices are clinging to their 'buy' signals - although I suspect a rally today would not be enough to prevent a 'sell' trigger in these (NYSI shown only): Yesterday's Tick suggested a capitulation (although yesterday's very weak close did not): However, I am still looking to the Transports for early (leading) strength. Wedge resistance was sliced following a positive test of channel support. Add to that a break of the long standing bearish divergence in stochastics and you have a recipe for a (pos

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The late October bounce for the Bullish Percents turned south, adding another level of pressure over and above Tuesday's selling. But even with the damage of the past couple of days the head-and-shoulder reversal is still valid: Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Swamped yesterday so there was no time for the Stockcharts.com review. Can squeeze it in today given yesterday's action was important for market bottom watchers. Yong Pan kicks the week off with a relatively bullish set of indicators; no bearish markers but six of his breadth and S&P watch levels are neutral: Looking at his indicator variables; the likes of the CPC and New Lows for the right-hand-shoulder are very different to the picture painted during the left-hand-shoulder; much more bullish - but, in themselves could be viewed as neutral and capable of going either way (which also means down.....) Intermediate time frame signals are all bullish: With a Joe Reed style chart showing a stochastic 'buy' Fifteen minute chart is interesting for demand buying at support; but the convergence of the moving averages also suggests plenty of resistance. First hour or so of trading will be key: Maurice Walker is anticipating a bullish cross in the Aroon this week although note

The reversal head-and-shoulder pattern will face its first big test Friday. The S&P is the index to watch as 900 needs to hold on a closing basis for the pattern to remain valid. The Nasdaq has a little more room because the nature of the neckline is angled and therefore the right-hand-shoulder will have a lower low than the left. For the Nasdaq the right-hand-shoulder may be viewed as a traditional double bottom reaction low (with a neckline around 1,675). The early October double bottom was violated by the break to new lows in late October. Should the S&P violate 900 as support by the close of business then the next target is the October reaction low of 850. Irrespective of 900/850 support the neckline at 1,000 would remain the confirmation level to a bottom. Technicals are mixed with a bullish 'buy' in Money Flow but a bearish 'sell' for stochastics. A closing break of 850 means the downtrend resumes and the bottoming process is reset to zero. Get the Fallond