By Paul Cherney
I was wrong in expecting a positive close for prices in Thursday's market. An early advance was greeted by the markets as a selling opportunity and the failure to hold intraday gains now makes the markets vulnerable to the downside.
I had been expecting some consolidation in the NASDAQ, but the market has been repeatedly moving to new two-day lows and the possibility of a washout is rising. Some caution is warranted.
The NASDAQ's close below 2576 has opened downside risk for prints in the 2522-2406 area of support. There is a focus of support in the 2502-2458 area. In the final minutes of Thursday's market, the NASDAQ managed to cling to support in the 2567-2554 area, but a move below 2554 could get the downside momentum started.
The NASDAQ has immediate resistance 2573-2611 with a focus 2588-2606.
The S&P 500 closed Thursday's market just below support in the 1339-1333. The next layer of support is 1329-1301, and within this layer of support there is a focus 1322-1311. The index has broad and substantial resistance 1351-1389, and there is a focus of resistance in the 1353-1368 area.
Cherney is market analyst for Standard & Poor's