Buyers Emerge on Dips

Another short-term positive sign for equity prices is the CBOE's total put/call ratio

By Paul Cherney

Thursday, Dec. 13, is the day that the active futures contracts roll forward to the March 2002 contracts.

The underlying trend for prices remains positive. In Wednesday's market the NASDAQ slipped down to print an intraday low of 1975.65, just inside the price gap of 1980-1963 and buyers emerged.

The NASDAQ is inside its intermediate term brick wall of resistance which is 1934-2106. Resistance becomes thick with prints 2061-2106. Intraday charts show multiple resistance layers- in Wednesday's session, the index recovered from mid-day losses to return to the immediate layer of intraday resistance which is 2007-2037. I view the intraday price action as a short-term positive.

The NASDAQ has well defined chart support 1965-1888 with a focus 1942-1913. Immediate intrday support is 1997-1982.

The S&P 500 has brickwall resistance 1153-1206. The S&P 500 has immediate (intraday) resistance 1162-1173.62. The index recovered in Wednesday's session to finish inside an area of chart support: 1132-1142 area. In Wednesday's session, the index printed below 1132, but only moved as low as 1126.01 before buyers lifted shares, therefore, immediate support under 1132 is now 1126-1115.

There were excessive put/call ratios in Wednesday's session. At 4:00 pm EST the CBOE's total put/call ratio was 0.90 which I interpret as a short-term positive for equity prices.

Cherney is market analyst for Standard & Poor's

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