By Paul Cherney Usually, when I see the kind of technical conditions which unfolded near the end of last week, a one day wonder (Monday) is followed by two days of searching for a bottom. A down day tomorrow would likely be followed by an up day on Wednesday and vice versa.
At this point in time I don't have enough technical evidence to rule out a probe lower and a test of the gap in the Nasdaq which is 1973.70-1941.57. But that would probably be the limit for downside risk in the immediate future.
The markets are in a "wait and see" mode right now, hoping for a positive corporate headline. Unless a new technical condition arises, downside looks limited.
Immediate Nasdaq resistance is 2039-2104 with a focus 2088-2101. The next resistance is a brick wall at 2137-2181.05. Immediate Nasdaq support is 2016-2000, there is overlapping support 2006-1973 which makes the 2006-2000 level a focus of buying support.
Immediate S&P 500 resistance is 1207-1218, there is a brick wall of resistance in the 1227-1240 area. Cherney is Market Analyst for Standard & Poor's