By Paul Cherney
Cisco delivered the headline that the markets needed to prompt some action. Friday's price action was good. It was a short-covering rally, but that is often what fuels the initial lift in a potential market reversal.
Short-covering rallies usually last one to four trade days. It is the character of the retracement which occurs after the short-covering rally has run its course which might offer insight into whether some sort of a more meaningful bottom might have been established.
Immediate (intraday) support for the NASDAQ is 1904-1895. More substantial support is 1883-1842. The NASDAQ has immediate resistance 1911-1931. The next resistance is 1951-1999, within this area is a focus of resistance 1963-1985 which looks formidable and would probably turn back prices unless there was a headline of undeniably bullish importance.
The S&P 500 has immediate support is 1170-1153. Immediate resistance is considerable in the 1185-1216 area, there is a focus of resistance 1205-1212.
Paul Cherney is market analyst for Standard & Poor's