By Paul Cherney
The markets have been unable to close appreciably higher or lower for the past 3 trade days. That puts them in a sideways trade range.
For the S&P 500, a breakout of the trade range should see prices move to the next levels of respective support or resistance. The S&P 500 has been bounded by 1111 on the downside, a move below this level finds the next support at 1103-1095. The upside for the S&P has been limited to a print of 1135.75, a move above this level finds the next resistance 1153-1200 (brick wall).
The Nasdaq has a shelf of resistance 1847-1888.39 which appears well defined, the index might have to drop for a test of support in the 1807-1793 area to shake out some non-believers in the upside before another assault of the 1847-1888 area. The 1807-1793 area is a focus of support inside the broader band of support: 1820-1781.
Based on weekly charts, the positive momentum in prices has not faltered yet. On a daily basis, the markets remain obverbought but for the time being it appears they are trying to work off the overbought conditions by trading sideways.
Cherney is market analyst for Standard & Poor's