By Paul Cherney
High end-of-day put/call ratios again on Wednesday will probably limit the severity of immediate downside for Thursday. A bounce on Thursday is possible, but upside appears to be capped and a significant trend higher does not appear likely.
Historical odds still favor that the S&P 500 should post a close of 911 or lower. Longer-term indicators based on weekly bars are in configurations which usually do not see appreciable upside, so sideways markets might unfold and the bottom edge of the sideways price band might not have been discovered yet.
The VIX (market volatility index) is above its 10-day exponential moving average, but toward the end of Wednesday's session the VIX was declining. Near Wednesday's close, the VIX's 10-day exponential moving average was 22.79. If the VIX can move below this level on Thursday, it should coincide with higher equity prices.
The S&P 500 has a layer of support at 920-911. The end of day charts clearly show substantial support at 910-862.
The S&P 500 has resistance at 938-945.
The Nasdaq has a band of resistance at 1489-1519.00; inside this band smaller pockets of resistance are 1499-1507.96 and 1507-1519.00, which makes the 1507-1508 area a focus of resistance.
Nasdaq support is 1478-1451, with thick support at 1471-1461. Wednesday's low print for the Nasdaq was 1478.15.
Cherney is chief market analyst for Standard & Poor's