The daily chart of the NYSE Composite shows that the trend line which connects the March and September highs (line a) has been tested this week. The May 2011 high at 8,718 is the next upside target, and it is not far above last Friday’s close.
The NYSE Advance/Decline line was strong last week, as it has clearly surpassed the prior highs (line c). The A/D line did drop below its WMA before the end of the year, but quickly reversed. It has long-term support at line d.
There is initial support for the NYSE Composite sits at 8,500, with the rising 20-day EMA at 8,430. The quarterly pivot is at 8,368, with more important support at last Monday’s low of 8,298.
The Spyder Trust (SPY) gapped higher Wednesday and added to the gains late in the week.
The close was just below minor resistance at $146.52 to $147.16 (line e), with additional levels at the September high of $148.11. There is psychological resistance at $150, followed by the first-quarter R1 pivot resistance at $150.58.
The S&P 500 A/D line surged in December, and is now above the highs from September (line g). It is still below the highs made last spring. There is first support for the A/D line at its WMA, with more important levels at the uptrend (line h).
There is first support for SPY in the $144 area, with the rising 20-day EMA at $143.20, which corresponds to the lower boundary of the gap. There is major support now in the $139 to $140 area.
The SPDR Diamond Trust (DIA) was able to overcome the December highs at $133.73, but is still well below the October highs at $135.77 to $136.44. Some of the Dow stocks have reached oversold levels based on monthly Starc band analysis, and are looking interesting on a pullback.
There is initial support now at $132.20 to $133 with more important levels at the quarterly pivot at $131.46.
The Dow Industrial A/D line (not shown) has been able to move above the April-May highs, which is bullish for large-cap stocks, as it is acting stronger than prices.
The PowerShares QQQ Trust (QQQ) was able to surpass the December highs last week, but like the DIA is still lagging the other market average ETFs. The next strong resistance is at $68.30 and then at the early October highs of $69.80.
The Nasdaq-100 A/D line was stronger than prices in December, as it made new rally highs before reversing sharply into the end of the month. It closed the week above its WMA and support (line c).
There is initial support now at $65.50 to $66.11 and the quarterly pivot. There is key support now in the $63.50to $64 area.
Two weeks ago, the Russell 2000 A/D line was able to move through the bearish divergence resistance that went back to the February highs. The A/D line retested the rising WMA last week before moving above the prior highs. This creates a bullish zig-zag formation.
There is first support for IWM at $84.70 to $85.20 and then in the $82.50 to $83 area.
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