By Paul Cherney
The Nasdaq has virtually fulfilled expectations for a close in the 2840-2870 area before the FOMC's announcement on Wednesday Jan 31. Where to next?
Probably higher. Near the close of trading in Monday's market, intraday measures of the buying demand of Nasdaq volume hit robust levels which usually means that a retracement in prices will be viewed as a buying opportunity. So, weakness in the first 20-30 minutes in Tuesday's session might prove to be an intraday turning point for higher prices.
Monday's volume was slower than normal and this is often one of the first signs that an upleg could be running out of believers, but the trend remains in place for higher prices until proven otherwise.
Immediate (intraday) support for the Nasdaq is a thin shelf 2827-2804 with a focus 2809-2804. More substantial short-term support is 2794-2763.
The Nasdaq is testing a broad band of resistance(based on end of day data) in the 2814-2916 area. Within this band of resistance there are two focuses of resistance nestled in each other: 2840-2873 and 2847-2862.
The S&P 500 has immediate support in the 1350-1342 and 1347-1339 area which makes the 1347-1342 area a focus of support.
The S&P 500 has a substantial layer of resistance in the 1351-1389 area witha focus 1366-1370.
Cherney is market analyst for Standard & Poor's