A Bumpy Road Higher

Wednesday's daily chart pattern is a positive for prices on Thursday. But any gains may be hard-won

By Paul Cherney

All the sideways travel in the markets that occurred from the last week of October until this past week represents a sturdy base of support. Those levels are 1425-1317 for the Nasdaq and 926-867 for the S&P 500. I do not expect these levels to break.

There is probably still a little reluctance on the part of traders to commit to the long side ahead of the Dec. 8 deadline for Iraq is to declare all unsanctioned weapons.

On Wednesday, the daily chart pattern of a drop and then a recovery is a positive for prices on Thursday. But I think any gains will be hard-fought without a positive headline to boost morale.

The closer we get to Tuesday, Dec. 10, the more the odds build for the re-establishment of a more consistently positive price trend.

Support: The S&P 500 has multiple stairsteps of support within the broad 926-867 area: 915-907, 910-904 (which makes the 910-907 area a focus of support), and 897-887.

Immediate Nasdaq support is 1426-1407.

Resistance: The S&P 500 has resistance at 932-965. Immediate intraday resistance is 932-944.

The Nasdaq has resistance at 1445-1461.45, then 1474-1506 and 1492-1568, which makes the 1492-1506 area a focus of resistance.

Cherney is chief market analyst for Standard & Poor's

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