By Paul Cherney
This is a battle of large market caps versus smaller market caps. Both the Nasdaq and the NYSE had more advancers than decliners in Friday's session but the major indexes had little to show for the broader markets strength.
Good moves higher in energy related stocks are not enough to force the major indexes higher but a persistent audience for earnings reports can keep prices from falling.
Prices for the Nasdaq and the S&P 500 are in areas of the charts where resistance is considerable and it has become a battleground between bulls and bears. In this past week, Wednesday saw advances on big volume (relatively speaking) but the following trade day (Thursday) saw lower closes on even bigger volume. The price pattern most bulls like to see is a advance on big volume and then a retracement on smaller volume.
This is tangible evidence that the markets are at critical levels where bulls and bears are locked. The possibility of a sideways trading range is growing.
For now, there has been no break-down and there has been break-out to the upside. I think the seeds for profit-taking have been planted, but unless the Nasdaq posts a close below 2144.78, or the S&P 500 posts a close below 1212.21, then the prospects for something a little more to the upside remain in place.
Immediate Intraday Resistances:
• Nasdaq immediate intraday resistance is 2186.01-2193.19.
• If the Nasdaq does push above 2193.19, Nasdaq intraday resistance based on intraday prices from May and June, 2001, finds the next layer of intraday resistance at 2205.54-2264.58, with a distinct layer of resistance at 2211-2249; focus is 2211-2233.33.
• S&P 500 intraday resistance starts at 1231, becomes thick 1232.32-1236.56. The next meaningful resistance is 1249.23-1267.
Immediate Intraday Supports:
• Nasdaq support: 2183-2175, 2167-2144.78, with a thin shelf at 2135-2122.
• S&P 500 has immediate intraday support at 1231.79-1223.03 with a focus 1226.07-1224.70. thin shelf 1219-1215, then 1206-1183.
• Correction: In the previous comment resistance for the S&P 500 should have read 1232-1286.62 (daily chart resistance) with a focus of resistance at 1249.23-1267. A a test of this focus is now possible.
• Nasdaq: 2170.99-2193.19, then thick resistance at 2263.75-2328.05.
Cherney is president of Cherney Market Analysis