By Paul Cherney
The markets need a positive headline to head higher. Without one, more sideways action with a slightly negative bias might unfold.
If the Bank of England cuts rates on Thursday morning, it should be a positive for U.S. markets.
There are no clear indications as to price action, but since intraday indicators did not reach oversold levels for the Nasdaq, it is possible to see a drop into the next layer of support, which is 1504.22-1492.16. If there is a drop tomorrow morning and the Nasdaq index prints under the 1492.16 level for more than 4 minutes without attracting buyers, then odds would start to increase for additional downside risk. The next layer of support starts at 1488, but the focus of support is 1479-1469.
The Nasdaq has immediate resistance at 1522-2531.82. Next resistance is 1543-1595, with a focus of 1547-1568.
The price action surrounding the highs in December, 2002, and January, 2003, for the S&P 500 has created some pretty consistent resistance in the 930-935.05 area. The next resistance (established in August, 2002, and the beginning of July, 2002) is 944-965, with a focus of 951-957. The resistance starts really at 939 but it does not become organized (consistent sideways price action) until 942-965, especially strong resistance with prints of 951-957.
Immediate intraday support for the S&P 500 is 932-928, then 924-918, then 915-910.
Cherney is chief market analyst for Standard & Poor's