By Paul Cherney
I do not have anything (technically) which suggests that the market is ready to make a reversal which just trends higher and higher, but the odds have increased (due to extremely oversold short-term conditions) that Thursday could see a shakeout of weak hands in the morning and with those sellers out of the way a certain amount of resistance to advance will have been eliminated which creates the potential for a reversal and an advance on the day.
Nasdaq price prints near 2052 could occur, this price level could be exceeded briefly on the downside and then a reversal could easily follow.
Caution ahead of the earnings warning season (which usually starts after the second week of June) will probably prevent any rebounds from garnering convincing, uninterrupted follow-through.
The Nasdaq is in the lower edge of a band of support in the 2233-2052, I am expecting that prices can test, even undercut 2052 on an intraday basis, but that a move to this area will cause short-sellers to start to buy to cover and this could create the atmosphere an intraday reversal and even gains on the day. The next layer of support is 2030-1972. Immediate resistance is 2163-2207 then 2233-2283.
The S&P 500 has immediate resistance 1253-1295 with a focus 1265-1283. The next layer of support is 1242-1207.
Cherney is Market Analyst for Standard & Poor's
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- China Warns It May Retaliate If U.S. Imposes Metal Tariffs
- Box-Office Smash ‘Black Panther’ May Be Game Changer for Artists
- All 65 Aboard Plane Feared Dead in Crash in Southern Iran
- Apple’s New Spaceship Campus Has One Flaw – and It Hurts
- Winn-Dixie and Tops Owners Are Said to Prepare for Bankruptcy