More Upside Likely

Intermediate term indicators point to another day of gains on Thursday

By Paul Cherney

Intermediate term indicators (intermediate term for my intraday calls, namely 60 minute bars) for both the Nasdaq and the S&P 500 improved to levels that tilt the odds in favor of another day of gains on Thursday. The recovery in these indicators was substantial and I think there might have been enough momentum built up to carry prices higher again on Thursday, but unless I see other improvements in the intraday indicators tomorrow, I can really only expect the momentum established on Wednesday afternoon to see some follow-through for higher prices again on Thursday.

I simply don't have a consensus of indicators to suggest that the reversal intraday and the momentum gains in the late afternoon was anything more than a short-covering lift attended by some peripheral bargain hunting.

The Nasdaq finished Wednesday's session inside immediate resistance 1763-1791. The next layers of resistance are 1818-1827, 1841-1878. Immediate Nasdaq support is 1760-1677 with a focus 1740-1701. Wednesday's intraday low was 1729.20.

The S&P 500 index has well defined intermediate term support in the 1111-1052 area. There is a focus of support inside this region at 1097-1080, below 1080, the next layer of support is 1075-1052.

The S&P 500 index has immediate resistance 1101-1109 the next resistance is stacked, 1112-1129.40. and 1126-1139.50 which makes the 1126-1129.40 area a focus of resistance.

Cherney is market analyst for Standard & Poor's

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