By Paul Cherney Immediate downside risk appears limited from current levels.
Seasonal strength should keep the majority of investors on the long-side in anticipation of additional upside before the end of the year, but patience is probably going to be needed because if Oracle (ORCL) does not impress (positively) after Monday's close, then the markets might have to shake-out and then establish a sideways base before anything believable to the upside (even just short-term) can unfold.
End of day indicators for the S&P 500 and the NASDAQ are neutral, meaning that they are in zones which represent a balance between buying demand and selling pressure. Readings like this are referred to as neutral because they offer little (or virtually nothing) in terms of predictability of price movement.
Near the end of trading on Monday, intraday measures based on NASDAQ 60 minute bar charts were managing to register right at thresholds which usually indicate that there is only limited downside left for the short-term intraday decline.
Immediate intraday resistance for the NASDAQ is 1923-1931, then more substantial resistance is 1940-1951. NASDAQ resistance starts to get thick 1956 through 1967.52. Resistance becomes very thick 1966-1980. Technically, resistance based on daily bar charts runs all the way to 2011.25.
The NASDAQ has substantial support 1916-1878 with a focus 1907-1896 and prints in this area should attract buyers.
Based on a longer-term view of the chart, the S&P 500 has a brick wall of resistance 1068-1090 (it usually takes a few attempts to break-down such a well-defined wall), and sometimes prices have to retreat, regroup and mount another assault before brick-walls give-way. In Monday's session, the S&P 500 managed to print an intraday high of 1082.79.
Technically, immediate resistance (based on end-of-day data) runs all the way up to 1106.
Immediate intraday resistance for the S&P 500 is 1075.29-1080.48.
Immediate support for the S&P 500 is 1068-1065. Additional support is 1060-1052, and if there were prints in this area, I would expect buyers to move in and take control of the markets. Cherney is chief market analyst for Standard & Poor's