New Support and Resistance Zones

The stock market made a huge run in the past two months with the S&P 500 up almost 14%. But momentum is now slowing, and with the Fed’s QE2 response to a lagging economy in question, it looks like it is time for stocks to take a rest.  For the S&P 500, the pullback will most likely be contained at the lower end of the 1,150 to 1,175 zone of support, but stocks could pull back all the way to the breakout at 1,130. For the Dow, the numbers look like 10,700 to 10,900. And the Nasdaq could drop to 2,320 to 2,425 with the first support line at 2,450.  If a correction occurs, investors should use the opportunity to jump aboard what looks like a train that could quickly accelerate once the April high at S&P 1,220 is topped. If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net .
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