A Thursday Bounce?
By Paul Cherney
A set-up is in place for positive closes on Thursday, but this might only be a one day phenomenon. The odds (since the beginning of this year) of this technical formation producing positive closes are about seven in 10.
The following comment may seem counterintuitive but it is the pattern I have observed again and again: the best recipe to produce gains on Thursday would be weaker prices at the open.
Immediate (intraday) resistance for the Nasdaq is 1864-1893 with a focus of resistance 1865-1872. The next resistance level is thick 1897-1933 with a focus 1902-1916.
The Nasdaq finished Wednesday's session in a test of the 1855-1817 area of support, within the support there is a focus of support 1837-1827. If 1817 breaks, the next appreciable chart support does not really occur until 1785-1700 with a focus 1757-1725.
The S&P 500 has immediate resistance 1160-1171 then 1176-1185. Immediate support is 1156-1119 with a focus 1144-1130. A dip into the 1144 area on Thursday might be used by short-term bears to cover shorts, thus lifting prices.
Cherney is market analyst for Standard & Poor's
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