If I were asked to come up with an explanation of today's rather lackluster equity performance, all I could say is that there's just too much resistance at current levels. We continue to talk about how looking at different time frames can help traders view the markets and there are some resistance levels close by on the major indexes that are making it tough on the bulls.
Dow Industrials Chart - 60-minute interval
Our horizontal level of resistance (A) obviously has been a point of contention for the INDU today. A pullback to 10,700 wouldn't surprise us in the least.
S&P 500 Index Chart - 60-minute interval
The 200-period MA (thin red) at 1,337 earlier in the session looks to be the culprit of resistance for the S&P 500 (SPX.X). Traders looking for levels of support are now monitoring an "old" upward trend (B), then the 50-period MA (thin blue) near 1,305 and finally horizontal support (A).
NASDAQ Composite Index Chart - 60-minute interval.
An "old" level of support on the (COMPX) was enough this morning to create a problem for the NASDAQ. The next level of "support" for this index is at current levels and that's the downward trending 50-period MA (thin blue) at 2,466. After this it looks like the lows of 2,300. If you're trading plan for 2001 is to only trade NASDAQ stocks, you may want to let this index develop a base before jumping in and keep stops very tight. If you're going to "play with fire", make sure you have a fire extinguisher nearby.