By Paul Cherney
I was wrong about the markets working higher on Thursday. They tried to move higher but it became apparent early in the trade day that there just was not enough volume being generated to support an intraday trend.
I have intermediate-term indicators which are in set-ups that can be followed by net gains for as few as 5 trade days and sometimes more protracted runs unfold, but technically, these signals will not fire unless the VIX (volatility index) moves and closes below its 20 day exponential moving average. The 20 day exponential moving average of the VIX was roughly 25.92 as of Thursday's close.
The Nasdaq has immediate resistance at 1514-1526.41. The index has thick resistance at 1532-1550. The index's next focus of resistance is 1560-1570 and prints in that area would probably bring sellers to the market (if the index could get there).
For the S&P 500, immediate intraday resistance is 1017-1028 with a focus of resistance at 1017-1023.47; the next resistance is 1032-1037.80. There is thick price traffic at 1039-1047.
Immediate Nasdaq (intraday) support is 1503-1489. The end of day charts show a band of support at 1516-1466. The important support for the Nasdaq is the low set on Wednesday of 1474.56. If prices move below this level for more than 4 consecutive minutes without attracting sufficient buying interest to move prices back up to the 1490 level, then a wave of selling might enter the market and push prices lower for a test of 1455 (or lower), that would be a natural spot for some more short-covering to occur and prices could start to rebound intraday.
Immediate intraday support for the S&P 500 is 1011-1002. If the S&P 500 dips below 1002.61 for more than 4 consecutive minutes without attracting buyers, then a move lower to print near 985 (at least under 995) could easily unfold, but short-covering should stem the slide.
Here are the price ranges and closes for the Nasdaq and the S&P 500 from the day of the September, 2001, lows:
• S&P 500 intraday high 984.54, intraday low 944.75, close 965.80
• Nasdaq intraday high 1454.04, intraday low 1387.06, close 1423.19.
Cherney is chief market analyst for Standard & Poor's