The very strong A/D numbers last Friday pushed the A/D line to new highs, surpassing the August highs. This is positive and indicates that the market will follow the A/D line higher. The short-term A/D indicators were moderately overbought with last week’s close, so the decline on Tuesday was not a surprise. The S&P has good support in the 1072-1080 area, which I would expect to hold on a further decline. Once above 1105, there is resistance at 1120 and then 1131.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.