By Paul Cherney
I have no technical indication that a bottom has been reached.
Oftentimes, an exogenous headline (a headline NOT related to the equity markets) can create a wave of fear-driven selling (a shakeout) which forces wanna-be sellers to just give up and sell, abandoning hope of any rebound to exit at slightly higher prices. Whether or not the current U.S.-China spy plane incident will create such a headline is impossible to say, but one thing is for sure, there appears to be an awful lot of people who are still long this market who want to get out (that's why rallies haven't followed through to the upside).
The Nasdaq is barely within the lower portion of a layer of support which runs 1930-1770. The index has immediate (intraday) resistance in the 1792-1823 area with a focus of resistance 1803-1811. Next resistance is 1825-1877 level, with a focus 1839-1857. NASDAQ support: if 1770 breaks, prices could move all the way down to the 1715 area before buyers are enticed to bargain hunt. The next Nasdaq supports (under 1715) are 1654-1570.
The S&P 500 is within a band of resistance which runs 1136-1190.
Immediate support for the S&P 500 is 1150-1136 then 1142-1117 which makes the 1142-1138 area a focus of support. The index has immediate (intraday) resistance in the 1158-1182 area, within this zone is a focus of resistance 1166-1180.
Note: On Thursday, Mar. 22, I had a signal trip which historically has very high odds (5 out of 5 since 1986) that the current advance in the S&P 500 will ultimately rollover and undercut the 1117.58 level on a closing basis. This signal usually sees the undercut within 6 weeks. Which means there are roughly 5 weeks left to go.
Cherney is Market Analyst for Standard & Poor's