Still Room for Gains
By Paul Cherney
Monday's price action was okay. Short-covering rallies usually last one to four trade days. Monday was day two. It will be internal measures during the retracement which occurs after the short-covering rally has run its course which might offer some insight into whether a more meaningful bottom might have been established.
Immediate (intraday) support for the Nasdaq is 1904-1895. More substantial support is 1885-1863. The Nasdaq has immediate resistance 1922-1941 with a focus 1929-1935. The next resistance is 1951-1999, within this area is a focus of resistance 1963-1985 which looks formidable and would probably turnback prices unless there was a headline of undeniably bullish importance. I can't rule out a test of the 1964-1985 focus of resistance before this lift (which started on Friday) runs out of momentum.
The S&P 500 has immediate intraday support 1179.32-1176.69. The next support is 1170-1163. Immediate resistance is considerable in the 1185-1216 area, there is a focus of resistance 1205-1212.
Cherney is market analyst for Standard & Poor's