By Paul Cherney
I am no longer as concerned about the Nasdaq making a dip to test 1745-1705 because in the overnight systems run on Thursday night, the system which produced the warning of eight in 10 odds of Nasdaq prints 1745-1705 was extinguished (declared no longer valid (wrong), by other technical developments that did not occur). This doesn't necessarily mean that the Nasdaq won't print 1745-1705, it means that this system is no longer predicting it, and that makes me think that downside is limited.
Based on a review of the trading activity and price and volume movements for the S&P 500 in the week after the Easter break, I think the chances are good for an S&P 500 low on Monday or Tuesday (probably Monday), which should mark the beginning of a labored (but positive) advance for the S&P 500. (sometimes just a three to five day rise, othertimes a more protracted move unfolds.) Also, I have an indicator based on the relationship between New York Stock Exchange breadth and the price movements of the S&P 500, which looks like it could register a positive signal as of Monday's close.
If there is upside next week I do not expect it to be an uninterrupted trend. There is still too much reluctance to commit ahead of the first quarter earnings report.
The Nasdaq index has a layer of immediate support 1844-1824, then 1808-1773, with a focus 1803-1793. Immediate intraday resistance is 1851-1874.
The S&P 500 is testing immediate resistance 1142-1157. Resistance actually runs 1142-1174.
The S&P 500 has immediate support 1132-1126. There is considerable support for the S&P 500 in the 1130-1107 area.
Cherney is market analyst for Standard & Poor's