The Dow and S&P 500 are off their lows, but remain stuck in a tight trading range.
S&P 500 and Dow 60-Minutes Chart
The S&P 500 has been trading inside a tight 10-point range between 1,190 and 1,200. Some attempts have been made to break these shackles, but the index always seems to find its way back into the range. 1,200, which has acted as support in the past, now wants to take on the role of resistance.
The Dow also refuses to give us any directional clues, stuck in the middle between 10,230 and 10,325. While the 50% retracement level is acting as resistance for the S&P 500, 10,230 is supporting the Dow. If that level can hold until short-term resistance at 10,325 is broken, there is still some overhead resistance at 10,400 and a rapidly declining 50-period moving average. Short-term MACD indicators are suggesting a test of the upper boundary, but there are just that, short-term oscillators.
The individual components responsible for the Dow's inactivity are AT&T, Boeing, and GM, which are up over $1, and IBM, JP Morgan, and 3M, which are down over $1. The S&P 500 is a little more lopsided, with 11 stock up over $1 and 25 stocks down more than $1.
IBM Daily Chart
By far the biggest Dow loser recently is IBM. After losing support at $111, the stock has dropped $9 in 3 days. In doing so it has plunged through the 200-day moving average and 38.2% retracement bracket. Support looks to be 100, which is a psychologically round number, the 50% retracement bracket, congestion area of previous highs, and soon to include the yearlong up trend. Needless to say, this is a key support area.