By Paul Cherney From Cherney Market Analysis
There are still more earnings reports to come. Each one holds an element of hope for market participants that good earnings and guidance can create an atmosphere that could propel the markets higher, but breadth measures are starting to weaken and the markets are tired.
These markets cannot rise on strength in energy stocks alone and I think that even if there was a short-term jump to the upside that allowed the S&P 500 to print 1249-1267, a move like that would probably not generate significant followthrough higher.
Prices for the Nasdaq and the S&P 500 are in areas of the charts where resistance is considerable. For now, there has been no break-down. The S&P 500 did manage to print new multi-year highs today, but the move higher made sellers more aggressive than buyers and the index was unable to hold onto those gains by the close. I think the seeds for profit-taking have been planted, but unless the Nasdaq posts a close below 2144.78, or the S&P 500 posts a close below 1212.21, then the prospects for something a little more to the upside remain in place, although I do not like to see the breadth declining and that is what I am seeing.
Immediate Intraday Resistances:
Nasdaq immediate intraday resistance is 2175-2193.19, resistance gets thick 2186.01-2193.19.
If the Nasdaq does push above 2193.19, Nasdaq intraday resistance based on intraday prices from May and June, 2001, finds the next layer of intraday resistance 2205.54-2264.58 with a distinct layer of resistance 2211-2249, focus 2211-2233.33.
S&P 500 intraday resistance starts at 1231, becomes thick 1232.32-1236.56. In Monday's session prices managed to move to 1238.36, so that technically becomes the upper edge of immediate resistance. The next meaningful resistance is 1249.23-1267.
Immediate Intraday Supports:
Nasdaq support: 2167-2144.78, thin shelf 2135-2122.
S&P 500 has immediate intraday support at 1231.79-1223.03 with a focus 1226.07-1224.70. There is a thin shelf of support 1219-1215, then 1206-1183.
S&P 500 resistance is 1232-1286.62 with a focus of resistance 1249.23-1267, a test of this focus is still possible, but a move below 1212 would raise doubts about that event in the month of August.
Nasdaq daily charts resistance above 2193.19 becomes thick 2263.75-2328.05.