An Uphill Climb
By Paul Cherney
Intermediate term technical measures are negative (these are momentum based and will lag turns in the market by two to five trade days).
Late day price and volume measures on the Nasdaq just simply did not reach levels which tilt the odds to favor multiple days of gains. I think upside in Thursday's market will be labored unless there is some sort of a headline to sustain followthrough buying. Alan Greenspan might provide that headline. The Fed Chairman is on Capitol Hill on Thursday in front of the Senate Budget Committee. If Mr. Greenspan provides a slightly more upbeat perspective on the economy than he did in his Jan. 11 speech, then that will inspire more buying. Regardless of whether Greenspan manages to provide a bit of cheer, I think the markets are going to need some sort of a bullish headline to move higher on Thursday, because the price movement and the volume measures on Wednesday just did not reach critcal mass (in terms of the Nasdaq).
The Nasdaq has intermediate term support at 1965-1853. In Wednesday's session the 1887-1853 area prevented prices from moving lower. There is a focus of support within this zone at 1883-1867.
The Nasdaq has immediate intraday support at 1911-1902. Considerable resistance can be found at 1922-1985.83, with a focus at 1942-1965. Unless there is a headline which is embraced by the masses as undeniably bullish, then the Nasdaq 1942-1965 area is probably the very best the index can do in this rebound from short-term oversold conditions.
The S&P 500 index finished Wednesday's session inside resistance of 1123-1129. The next layer of S&P 500 resistance is 1138-1151, which is part of a broader band of resistance at 1138-1159. Well-defined intermediate term support is 1111-1052.
Cherney is market analyst for Standard & Poor's