By Paul Cherney
The technical condition has not changed dramatically since Friday's close: measures of price momentum and volume have a positive bias. There has not been a wave of volume in which up volume swamps down volume, but there is a positive bias in place. Concerns that the positive bias is evaporating would be increased if the Nasdaq moved under and closed under today's low of 2,073.82, for the S&P 500, a close under 1,217.62 would raise concerns of additional short-term weakness (1,217.62 was the low print on an intraday dip in prices on Friday).
The Nasdaq has not closed above the 2,093.68 level and this is a short-term concern because in Monday's session, the index moved above 2,093.68, but the ultimate reality of the foray higher was that the higher prices motivated sellers not buyers.
Immediate resistance for the Nasdaq is substantial (many days) in the 2,068-2,116.75 area. There are two concentrations of price activity in this area: 2,078-2,093.68 and 2,101-2,111.43.
For the S&P 500, immediate resistance runs 1,215-1,226.27. Above 1,226.27, the next layer of resistance is 1,240-1,286 with a focus 1,246-1,261.
The S&P 500 has immediate support at 1,217-1,204, overlapped at 1,206-1,197 which makes the 1,206-1,204 area focus of support.
The Nasdaq has immediate support at 2,085-2,067.30. Next supports are 2,064-2,048 and 2,055-2,036, which makes the 2,055-2,048 area a focus of support.
The 30-day exponential moving average of the VXO was 12.10 near the close of trade on Monday. Usually, when the VXO is below its 30-day and putting distance between itself and its 30-day, stock prices are rising, but the VXO finished Monday at 11.64, below its 30-day. This technical measure can easily shift to negative by rising. My interpretation of the VXO chart is that it should be a positive for intraday price action if the VXO moves below the 11.64-11.54 area.
Cherney is chief market analyst for Standard & Poor's