(Click on the chart to enlarge and get full view).  The INDU  formed a Hammer candlestick pattern at the bottom of the trading range on substantially higher volume.  The Hammer is a strong bullish candlestick pattern and when positioned at the bottom of a range it can many times signal a trend reversal.  It looks to me like the “smart money” just shook some weaker players out of the market and positioned themselves for a bit of an up move.  We’ll watch to see if there is follow through.  Moderate support 11140, strong resistance at 11550.

(Click on the chart to enlarge)  See INDU commentary.  We have moderate to strong support just under the close of Friday’s Hammer at about 1235.  The resistance at 1265 is moderate with stronger resistance at 1286.  Could run back up to test the first level of resistance at 1265-1270.

(Click on the chart to enlarge)  The NDX formed a gap down ”Spinning Top” candlestick pattern which indicates more indecision than the Hammer which was formed on the INDU and SPX.  We need confirmation.  The index is between areas of strong support and resistance.  I feel we will have a small bounce here and then look for follow through.  Short term oversold and a bias to the upside.

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