By Paul Cherney
It was August 2000 (after the earnings reports and the warnings were fading from memory) that the markets (S&P 500 and Nasdaq) put in a consistent trend higher (all on low summertime volume). And the chance for that happening now are good.
I think the downside is limited for the next couple of weeks and a modest trend higher should unfold.
A trend just means a tendency, it does not mean that every single day is a winner. A day or two of sideways consolidation and/or lower prices can occur at anytime. Retrenchments should be shallow.
The Nasdaq has a thin shelf of intraday support in the 2060-2053, more substantial support is 2040-2016 and this is considerable (strong) support which I do not think will be violated.
The Nasdaq is testing immediate resistance in the 2069-2105 area, within this resistance is a focus of resistance 2069-2083. The next resistance is a brick wall at 2137-2181.05 and this is the likely area for some profit-taking.
The S&P 500 has stacked supports from 1207 through to 1190. The next support is 1184-1174. The index has resistance 1217-1223 but Brick Wall resistance (and a likely spot for profit-taking) does not occur until 1227-1242.)
Cherney is Market Analyst for Standard & Poor's