By Paul Cherney
Intraday indicators for both the Nasdaq and the NYSE reached levels on Friday which usually carry a residual positive effect on prices which can last for several trading days. This does not mean that there can't be a down day, but usually, once readings like this occur, a one day price dip is greeted as a buying opportunity.
The Nasdaq has multiple levels of resistance.
The Nasdaq ended Monday's session near the top of the immediate intraday resistance, which is 1,877-1,892.70; there is especially thick price action in the 1,884-1,891 area.
The Nasdaq is currently inside resistance established in September: 1,867-1,913. Additional layers of resistance are stacked and overlap: 1,908-1,946.23, with especially thick resistance at 1,921-1,937, and 1,925-1,957.
To sum up Nasdaq resistance, here are the thickest layers where stalls in any advance would be more likely: 1,884-1,891, 1,908-1,913 and 1,925-1,937.
S&P 500 resistance is 1,032.60-1,050, based on intraday price action from June, 2003. There is a focus of resistance at 1,035-1,041. The next resistance is big at 1,048-1,107, from March, 2002. The 1,048-1,107 resistance has especially thick price action at 1,068-1,107.
Two different measures of the potential upside for the S&P 500 after the early September bullish breakout to the upside (above the 1,015 level) target 1,047 and 1,070 as potential upside prints.
Immediate intraday support for the Nasdaq is 1,882-1,870. Another layer of support is 1,856-1,827.
The Nasdaq chart has a gap in prices which runs 1,864.54-1,842.55, in the event there is aggressive profit-taking and prices move into this gap (meaning print below 1,864.54), I would expect to see accumulation taking place.
The S&P 500 has immediate support at 1,026-1,014 with a focus of support at 1,023-1,018.
Cherney is chief market analyst for Standard & Poor's