Searching for Direction

After Wednesday's action, there aren't any major signals to rely on

By Paul Cherney

Most people aren't really sure what happened in Wednesday's market (me included). Greenspan did not really say anything that the markets had not already heard. There was talk that the Cisco (CSCO ) earnings estimate cut by Wachovia created a domino effect of tech selling. Goldman announced that it dropped coverage of 13 semiconductor stocks and they declined to comment on when coverage would be resumed. (Terry Ragsdale, the semiconductor analyst at Goldman announced his resignation.)

I do not have any major signals of excessively overbought or excessively oversold.

In the overnight session run from Tuesday, there were several minor positive signals which usually can generate two days of gains, but that did not prove to be the case for both the NASDAQ and the S&P 500 in Wednesday's session. Thursday could see a dip in prices to retest the intraday lows of Wednesday's session before trying to labor higher. I do not have any major signals to rely on right now.

The NASDAQ has immediate resistance 1777-1793.73. There is a gap in the price chart which was created by the downside opening on Feb. 19. That gap is 1791.01 to 1801.67. This gap will get filled at sometime in the future, but probably not on Thursday. NASDAQ resistance above the 1803 level becomes thick 1820-1847. I think any print above the 1803 will bring sellers to the market unless there is a headline of indisputably bullish importance.

The NASDAQ has a well defined band of intraday support 1752-1734 there is a focus of support inside this band at 1747-1740.

The S&P 500 has well defined intraday support at 1102-1093. The S&P 500 has thick resistance 1116-1139.50 with a focus of resistance 1124.72-1130.

Cherney is market analyst for Standard & Poor's

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