Signals Still Positive

The residual positive effect from Frisday's action could last for several trading days

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

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