By Paul Cherney
Intermediate term expectations for S&P 500 at 1068 or higher, and NASDAQ potential for closes of 1988 or higher remain in place.
There are mixed signals for Thursday's market. End-of-day indicators which combine price with volume suggest a lower close on Thursday. Part of the data used in these indicators includes Monday's abnormally low trading volume due to the Columbus Day holiday for the bond market, so the reliability has to be questioned a little bit, but I would still expect some sort of an intraday shakeout to unfold if not outright losses. The reason I wrote that there are mixed signals at the top of this paragraph is because intraday indicators based on 60 minute price bars are at levels which often coincide with an oversold bounce which can last 1 to 3 trade hours.
Immediate resistance for the NASDAQ is 1937-1966.87 with a focus 1945-1959.
Immediate resistance for the S&P 500 is 1047-1053.79 with a focus 1047-1050.11. Next resistance above 1050.11 is 1068-1106 with a focus 1068-1090.
Immediate NASDAQ support is 1934-1921.96. If the NASDAQ undercuts 1921.96 for more than 3 or 4 minutes without attracting buyers to lift prices, a test of the 1917-1905 area would probably unfold and an effective shakeout would probably be able to force prices under 1908. The next stairstep of support for the NASDAQ (under 1905) is 1903-1877, with a focus 1892-1888.
The S&P 500 has immediate support 1040.64-1026.19.
Here is a look at overhead resistance levels based on longer-term historical intraday charts:
• The S&P 500 resistance above 1050.11 is well-defined at 1068-1106 with thick, brick-wall style resistance 1068-1090.
• The NASDAQ has a huge wall of resistance 1937-2098.74 which was established by price action in December of 2001 and January of 2002. Inside this broad area of resistance there are three thick layers ofresistance 1937-1958.96, 1979-2011.25, and 2042-2073.
Cherney is chief market analyst for Standard & Poor's