By Paul Cherney
The line of least resistance is for higher prices. Retracements will occur, but until I see an advance which does not garner good volume, (or some other technical condition arises), then I will beome concerned about downside.
The Nasdaq closed Thursday's session at the upper edge of the focus of resistance in the 2143-2182 area. This focus is inside the bigger band of resistance which I had slated at 2071-2244. After reviewing intraday charts, I am going to revise my estimates of resistance and I will slate resistance as 2184-2354. Inside of this resistance there are ledges of resistance the first one is 2233-2264 and the first move into this area is probably going to bring some sellers to the plate.
The Nasdaq is overdue for some sort of profit-taking (read negative close), but one of the characteristics of a bull run can be that they don't look back which only adds to buyers' frustration and can ultimately lead to a buyers capitulation which satisfies short-term buying demand and marks a time-out for the markets.
Immediate (intraday) support for the Nasdaq is now 2130-2074. The S&P 500 has immediate 1238-1223 then 1193-1158. The index finished Thursday's session in a test of the immediate resistance in the 1253-1273 area.
Cherney is Market Analyst for Standard & Poor's