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Better Days for Bulls?


By Paul Cherney Intermediate-term measures of accumulation and distribution are neutral with a positive bias. Wednesday's price and volume moves were positive but not strong enough to dramatically improve the chances of a protracted trend higher.

The short-term benefit of the doubt is in favor of bulls, but concerns about downside would rise signficantly if the CBOE volatility index, or VXO, climbs back above its 10-day exponential

moving average, which is close to 12.69 right now. The VXO remains well beneath this level; on Wednesday, Feb. 2, it was 11.38 very near the close of trading.

Immediate

resistance levels are 2,066-2,116 forthe Nasdaq composite index, with a focus at 2,074.70-2,094. Intraday resistance for the S&P 500 index is 1,980-1,995.98. Next resistance is 1,205-1,226.27, with a shelf of resistance at 1,205-1,209.53, and another shelf of resistance at 1,215-1,226.

Immediate

supports are: Nasdaq, 2,060-2,053; S&P 500, 1,192-1,182.

Historical Fact: In the past 47 years, strength in the first half of February is very common after a down January. Based on S&P 500 data since 1958, 76% of the time, the highest intra-month close for February has occurred on or before the 11th trading day of the month (the 11th trading day this year is Feb. 15). Cherney is chief market analyst for Standard & Poor's


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