Downside Looks Limited
By Paul Cherney
Unless more uncertainties are created by occurrences in the Middle East, downside appears limited.
On Monday, June 18, the Nasdaq registered its seventh consecutive losing session, and the odds (based on data since 1989) are about seven in 10 that the index will undercut and close below the 1988 level sometime up until the close of trading on Monday, July 2. There is a Nasdaq price gap which runs 1973.70 through 1941.57, and more of the gap could get filled.
The FOMC meets on Tuesday and Wednesday and there could be a day of hesitation (modestly lower prices) on either Monday or Tuesday.
The Nasdaq has immediate resistance in the 2046-2084 with a focus of resistance 2052-2075. The next resistance is the 2100-2187 area.
The S&P 500 is back inside support in the 1228-1219 area. The index has well-established support in the 1212-1184 area. Immediate (intraday, representing ultra-short-term) resistance is 1233-1240, but the next level of well-organized resistance is 1241-1277 with a focus 1241-1263.
Cherney is Market Analyst for Standard & Poor's