By Paul Cherney
This market has two faces, the large caps and the rest of the market. Even though my breadth and New highs/New lows measures are positive, it is the weight of the weak stocks which carry large market caps (GE is the largest market cap) which is preventing the markets from producing anything significant to the upside.
The Nasdaq has support in the 1742-1696 area. Intraday (short-term) charts still look constructive.
Investors were not impressed with the earnings reports delivered on Monday. Caution reigns.
There might not be terrific upside, but the downside looks limited (in the short-run).
In the longer-term, the markets are going to have to demonstrate the ability to overcome resistance levels. And the resistance levels I think they have to overcome would be a Nasdaq close above 1805 level, an S&P 500 close above 1136. (If prices continue to move lower I will adjust these price levels lower.)
Immediate Nasdaq intraday support is 1747-1736. The more substantial support as depicted by the daily charts is 1742-1696.
Immediate intraday resistance for the Nasdaq is 1753-1772 and 1769-1803 which makes the 1769-1772 area a focus of resistance.
The S&P 500 moved to a new multi-week low (intraday) and now immediate support is 1101.50-1074 with a focus 1097-1080, these are price shelves inside the broader band of support which is 1111-1052.
The S&P 500 has immediate resistance 1117-1136 with a focus of resistance 1121-1125.
Cherney is market analyst for Standard & Poor's