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Positive Momentum in Place

By Paul Cherney The markets have reached immediate

resistance levels.

During Friday's session, intermediate term indicators (intermediate term for my intraday calls) hit levels which usually mean that there should be residual positive momentum (higher prices). This means that even a couple of days of price weakness over the following week usually does not prevent the markets from having closes higher than Friday's.

One of the more bullish events which could occur on Monday would be a gap higher which garners follow-through and closes at the highs of the session.

More than likely, there is pent-up demand for profit-taking on a short-term basis, and opening gains on Monday might make the price move look too enticing to short-term traders. Some profit-taking might pull an early advance back into a sideways range on the day (unless there is a headline of undeniably positive impact).

The Federal Open Market Committee meets on Tuesday and most market observers expect no change in rates.

Supports: Immediate intraday

support for the S&P 500 is 924-918, then 914.82-910.92, then 907-896.

Immediate support for the Nasdaq is the focus of support which was surpassed in Friday's trading: 1500-1491, then 1487-1469.

Resistances: S&P 500 resistance is 918-935, with a focus of 924-931. The next resistance is 951-965, but without a headline, the first single day move above the 935 level will probably bring a day of profit-taking.

The Nasdaq resistance runs 1484-1521, then 1563-1660. Cherney is chief market analyst for Standard & Poor's

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