By Paul Cherney Momentum measures are positive.
The S&P 500 has closed above the 1,142.18 level. This represents a bullish breakout of the recent trading range and should be treated as such unless proven otherwise. The standard calculation for a potential price target is to take the trading range (1,142-1,122) and add it to the breakout point which would create a potential target of 1,162 for the S&P 500.
The Nasdaq needs to have a close above 2,023.54 to produce a bullish breakout. If and when it does, the recent trading range has been 2,023.54-1,963, or 60 points. A potential upside target would be 2,083.
The 10-day exponential moving average of the CBOE volatility index, or VXO, was 14.67 near the close on Wednesday. Stock prices often move lower when the VXO moves above its 10-day exponential moving average and puts distance between itself and the 10-day, so if the VXO were to move above the 14.67 level, this would be a signal that selling pressure might be strengthening, but right now, it's not there.
The Nasdaq's immediate
resistance is 2,015-2,023.54. The next layer of resistance is 2,037-2,079; inside this resistance is a thick band at 2,048-1,064.
The Nasdaq has
support at 2,015-2,000, then 1,996-1,982.
S&P 500 resistance is 1,149-1,176.97 with especially thick resistance at 1,149-1,158.98. The March, 2002, chart shows a well-defined layer of resistance at 1,166.27-1,173.94.
The S&P 500 has support at 1,142-1,134 and 1,129-1,113. Cherney is chief market analyst for Standard & Poor's