By Paul Cherney
Note to readers: This is Paul Cherney's commentary for the May 16 trading session. Because of a technical issue, we were unable to present it until May 17. We apologize for any inconvenience this may have caused our readers.
Resistance levels were broken in Wednesday's market and enough momentum was generated to shift expectations for higher prices for two out of the next three trade days.
When resistance levels are exceeded, they become support. Immediate support for the Nasdaq is now 2125-2109. The Nasdaq has established a well-defined wall of resistance in the 2187-2233 area, a move into this area looks likely over the next two or three trade days (probably on Thursday). This is part of the broader band of resistance in the 2174-2233 area. The next layer of resistance above 2233 is directly overhead in the 2242-2356 with a focus of resistance 2253-2310.
Nasdaq support below 2109 is substantial in the 2074-1995 area.
The S&P 500 has immediate closing support in the 1273-1253 area. There is a small shelf of resistance in the 1288 area, but the next substantial resistance does not occur until 1300-1341. The S&P 500 is on firmer technical goround than the Nasdaq. This does not mean that the S&P 500 will gain more on a percentage basis, just that I have more confidence in the S&P 500's ability to move higher over the next few trade days.
Cherney is Market Analyst for Standard & Poor's