By Paul Cherney
The markets need to consolidate their recent gains (especially the Nasdaq).
Downside appears limited, but upside also appears limited.
When a major index finishes the session at or near the lows of the day (as the Nasdaq did on Thursday), then any opening strength is usually short-lived and the market usually rolls over and heads back into negative territory before any protracted advance (even just intraday) could can even begin to unfold. If the Nasdaq gaps lower at the open and then moves lower for the first 30-60 minutes of trading, some sort of an oversold rebound could easily unfold.
The Nasdaq is testing support in the 2790-2732 area within this support is a focus of support in the 2765-2749 level. The next layer of support is 2700-2611 and any dip into this area would probably be viewed as a buying opportunity.
Immediate Nasdaq resistance is 2814-2893.
The S&P 500 has immediate support in the 1347-1339 area.
The S&P 500 has a substantial layer of resistance in the 1351-1389 area.
Cherney is market analyst for Standard & Poor's