Uptrend Still In Place

If this market really wanted to sell off, it had all the ammo it needed with Monday's bad news from Cisco

By Paul Cherney

I still think the trend for the next couple of weeks will be higher.

If this market really wanted to sell-off dramatically, it had all the ammo it needed with the Cisco (CSCO ) headlines. But the opening drop on Tuesday morning set the lows for the session within the first 6 minutes of trading. There were no follow-on sellers, or at least not enough to force prices lower because there were bulls standing there with open arms waiting to catch the stocks as soon as they gapped lower on the open.

This is option expiration week. Wednesdays in the week of Option Expiration week can see an opening move in one direction which often reverses from its worst (or best levels).

Intel (INTC ) is/was scheduled to report earnings after Tuesday's close (long after this commentary is written.) This will be another test of the sentiment in the marketplace. Have the markets already discounted all the bad news?

If the news from Intel is disappointing, we will get another chance to gauge the market's reaction. If Intel does not upset, then another move higher should unfold. (Many on the Street are pointing to IBM's (IBM ) earnings report due after Wednesday's close as the headline of focus because it is reportedly one of the few companies which has not pre-announced.)

Immediate (intraday) support for the Nasdaq has been clearly demonstrated in the 1890-1868 area. Additional support is 1840-1974, within this support area is a focus of support 1840-1828. (I do not expect the 1794 level to be broken in the near term.)

The Nasdaq has immediate (intraday) resistance in the 1920-1947 area with a focus of 1922-1942. On a more intermediate term basis (the next couple of weeks), the Nasdaq has resistance 1950-2031 with Major resistance 2071-2244. There is a focus of resistance within the 2071-2244 area at 2143-2182.

The S&P 500 has closed above an important resistance level (1183.51) which I view as short-term positive. Former resistance is now immediate support: 1184-1171. The next resistance is 1211-1271 with a focus 1233-1247. Immediate support after the 1184-1171 area is 1150-1142.

Cherney is Markety Analyst for Standard & Poor's

Before it's here, it's on the Bloomberg Terminal.