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Markets & Finance

Signals Point to Buying on Tuesday

By Paul Cherney Intraday readings near the end of the trading session on Monday have increased the odds that both the Nasdaq and the S&P 500 will see buying on Tuesday (and higher prices by the close).

In Monday's market, the Nasdaq tested the 2300-2251 level and buyers came to the market. The 2300-2251 area held prices on the day of the Fed's rate cut (before the announcement) so today's market must be considered a successful retest of that level.

An intraday oscillator which combines price and volume has moved into positive territory -- true for both the S&P 500 and the Nasdaq. The last time this occurred was near the end of trading on Jan. 2, the day before the Fed cut rates and put the markets into a rocket-shot.

Intraday readings tomorrow may offer a greater insight into the technical underpinnings of the market, but at this point I would have to say that weakness in the morning on Tuesday should be met by buyers.

The Nasdaq has intraday support in the 2351-2291 area. There is a focus of support 2350-2319 which has a good chance of containing any price weakness in the first hour of trading on Tuesday. Price supports based on daily bar charts are 2305-2251. I don't think that is possible for Tuesday unless there is a headline of undeniably bearish import.

Immediate resistance for the Nasdaq is 2398-2472 with a focus 2430-2450. Next resistance is 2489-2569. Cherney is market analyst for Standard & Poor's

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