By Paul Cherney
Technical measures are positive.
The following comment is based on my interpretation of the configurations I am seeing in 60-minute measures: Thursday, Oct. 28, could see an additional jump in the morning -- but then sideways trading. There is a potential for the sideways price action to persist for a few trading days. This is what I think will be the case unless I see something else in the overnight systems run or intraday on Thursday.
A lot of the buying demand on Wednesday was related to relief that oil prices finally dropped. That satisfied a lot of short-term buying interest and unless the CBOE volatility index, or VXO, can drop under 15.83 or crude oil continues to drop, price strength on Thursday might just see an equilibrium develop between buyers and sellers develop that keeps prices moving sideways.
Chart support for the Nasdaq is 1,957-1,934, then 1,927.51-1,914, then 1,916-1,906.
Chart support for the S&P 500 is 1,119-1,111, then 1,108-1,098.
Resistance for the Nasdaq: there is a small shelf of resistance right at current prices: 1,960-1,971.04, and directly above this layer, there is a well-defined brick wall at 1,972-2,006.58; this is all part of the 1,960-2,055 band of resistance.
The S&P 500 has resistance at 1,127-1,142.05, with thick resistance at 1,132-1,142.05 (a likely stall zone). Next resistance is 1,147-1,163.23. There is a focus of resistance at 1,147-1,150.57.
Cherney is chief market analyst for Standard & Poor's