More Upside Ahead
By Paul Cherney
Both the Nasdaq and the S&P 500 have sturdy bases 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.
Thursday, Dec. 12, is the 66th trade day anniversary of a cross of the VIX (market volatility index) below its 10-day exponential moving average (while that moving average was above 37.99 (very high)). Historically, the odds are 14 in 15 that the S&P 500 will close higher than the close it registered on the day the VIX crossed down through its 10-day exponential. Historical odds favor an S&P 500 close on Thursday above the 909.58 level.
As of Tuesday, Dec. 10, the historical odds strengthen for the re-establishment of a more consistently positive price trend. Over the past 42 years of the S&P 500, the odds are roughly 7 in 10 (74% of the time) that the December low will occur on or before (for this year), Dec. 10 (Tuesday). Seven in 10 odds means that there are 3 in 10 odds of lower prices. I do not expect any rocket-shots to the upside, just a little more consistency. Retracements should be shallow.
Support: The S&P 500 has multiple stairsteps of support within the broad 926-867 area; immediate intraday support is 897-887 and 891-872.
Immediate Nasdaq support is 1388-1367, with a focus of support at 1387-1378. Next definitive support is 1347-1317.
Resistance: The S&P 500 has resistance at 932-965. Immediate intraday resistance is 915-926.27, then 932-944.
The Nasdaq is near the top edge of its immediate resistance which is 1371-1395; the next resistance is 1407-1426.
Cherney is chief market analyst for Standard & Poor's