Initial Relief Rally, Now Defensive Play

Current markets looks to me is more of a defensive play as its losing its steam for upside, Initially we had rally after the big drop but that was just relief rally and market tape looks harder and harder to read. Now lets take a look at major indices with possible scenarios for the markets:

Standard and Poor's 500:
1.Range bound (1050-850)
2.Test lows around 850's.
3. Breaking 840's will be huge downward movement for another leg down which will take this economy to depression levels which i don't see for now, And it might happen in coming Q's depending on economy with levels around 650's)



and i'm seeing similar kinda of action with other two indices.

NASDAQ Composite
1.Range bound (1900-1450, resistance around 9500 and gap created around 1900 levels and that needs to fill before we move for any upside)
2.Test lows around 1500.
3. Breaking 1450 will be huge downward movement.)



Dow Jones Industrial Average:
1.Range bound (Lower 8k to mid 9k, resistance around 9500 and gap created around 10k needs to fill before we move for any upside)
2.Test lows around 7800-8100 and bounce with decent buyers.
3. Breaking 7800 will be huge downward movement for another 1000 points.)



In my next blog i will try to discuss about the dollar, oil, gold and also vix indices as there is more and more fear factor in the markets and the levels are being at higher bands all the time during entire crisis which shows that most the volumes we are seeing is not just buy and hold but they are either swing or day trading.