By Paul Cherney
Momentum measures are neutral with a slightly negative bias.
The trading ranges persist. There is not enough evidence to make a case for a higher or a lower market.
Sellers Monday afternoon might have only been intraday traders who just lost patience holding onto their long positions. There was no headline associated with the afternoon weakness.
The 10-day exponential moving average for the CBOE volatility index, or VXO, was 15.10 near the close on Monday. Stock prices often move lower when the VXO moves above its 10-day exponential moving average and puts distance between itself and the 10-day, so if the VXO were to move above the 15.10 level, this would be a signal that selling pressure might be strengthening.
The most important immediate short-term resistance level for the Nasdaq is 2,001-2,006.79, for the S&P 500 1,134.34-1,139.08.
S&P 500 support is 1,129-1,009.91, with a concentration of price action 1,125-1,113. Next support: 1,102.77 to 1,078 with a focus at 1,097-1,085.
The Nasdaq is having a more difficult time than the S&P 500. In Monday's session, the Nasdaq closed below its former support which now converts to the first line of resistance: 1,982-1,996.
The Nasdaq is testing its next little layer of support: 1,977-1,963.48. The lowest print for the Nasdaq over the past 16 trading days has been 1,957.58, a close below this level would open downside risk for a test of the next layer of support: 1,934-1,913.73. Overlapping support is 1,918-1,899, so the 1,918-1,913 area is focus of support.
Cherney is chief market analyst for Standard & Poor's