More Selling Likely on Monday
By Paul Cherney
I can't change history, but this market might write a new page for the market history books with its price action over the next few trade days. The historical odds are roughly 8 in 10 that the bottom for the S&P 500 has already been seen. The odds are roughly 2 in 10 that the S&P 500 retests the 1250-1240 level.
If the market closes anywhere beneath 1243 it will be writing a new page in the market history books (for price action in the first 3 months after a discount rate count).
The markets wrote new pages in the history books on the way up, and they can certainly do it on the way down, too.
Intraday readings near the end of the trading session on Friday have increased the odds that both the NASDAQ and the S&P 500 will see additional selling on Monday. One technical item which this market has not produced which is often an exclamation point at a definitive bottom is an "end of the day" CBOE Total Put/Call ratio of 1.00 or higher. Maybe we have to see that.
Chart support for the NASDAQ is 2433-2359 then 2305-2251. If prices break below the 2251, the next level of support is a thin shelf at 2205-2150. I will include the following support level only because it is the next level of truly substantial support beneath 2251: 2104-1926 with a focus 2053-1960.
The technical condition of the market does not look good for Monday's session.
Cherney is market analyst for Standard & Poor's