By Paul Cherney
The markets have a high susceptibility to bad headlines right now. The lack of total trading volume adds to this potential danger because with less willing participants, it takes fewer sellers to overwhelm fewer buyers. This is a tech buyers strike and usually, prices have to dip to entice sideline participation (or at least prompt short-covering) to signal some sort of an attempt at a stabilization or a reversal of the current decline.
The classic intraday pattern to mark the potential for some relief (even if it proves to just be temporary) is a drop in prices and a surge in volume as prices attract short-covering bears and short-term momentum players as buyers.
The Nasdaq index has a layer of immediate support at 1808-1773. There is a focus of support at 1803-1793 and early in Wednesday's session if prices dip into this zone and then fail to fall through it, a rebound could follow (intraday), but if prices cannot print 1822 or higher in that rebound, then further downside is likely. A retest of the upper edge of the support established in late February is very possible and this would be a natural spot for a short-covering rebound. The upper band of the buying support established near the end of February is 1765-1742.
Immediate Nasdaq resistance is now at 1822-1853. Immediate intraday resistance is at 1812-1822, then 1830-1834.50. The next area of resistance is 1841-1853.
The Nasdaq index has a layer of immediate support at 1844-1815, then 1808-1773, with a focus of 1803-1793. Immediate intraday resistance is 1855-1874 then 1878-1899.
The S&P 500 has immediate resistance at 1142-1157. Resistance actually runs from 1142-1174.
The S&P 500 has immediate support at 1132-1126. There is considerable support for the S&P 500 in the 1130-1107 area and if tested this should produce a rebound in prices.
Cherney is market analyst for Standard & Poor's