Downside Risk Limited

Historically, the lopsided trading seen in sessions like Thursday's results in a positive bias

By Paul Cherney

The outsized up-volume/down-volume ratio for the NYSE on Thursday puts the odds near 63% that Monday will be a gainer for the S&P 500. The average gain for the S&P 500 is about 0.79%, in today's terms, a gain of roughly 7 points.

Historically, in the aftermath of the lopsided trade we saw on Thursday (NYSE up volume was more than 15 times NYSE down volume), a positive bias is set in place. Upside will probably be a struggle though, especially if the next week sees more warnings like those delivered by Home Depot (HD ) on Friday. To sum it up: Downside risk appears limited for now until some other technical signal triggers.

Support: The immediate ledge of support for the S&P 500 is 904-898.32. The index 500 has firm chart support 884-867.

The immediate focus of Nasdaq support is 1376-1370.74, which is inside a broader range of support defined by 1375-1362.

Resistance: The S&P 500 has immediate resistance 915-926.27.

The Nasdaq has immediate intraday resistance 1382-1411.62. Prints 1392-1403 look like a likely spot for some longside short-term profit-taking (unless there is a headline of undeniably bullish importance).

Cherney is chief market analyst for Standard & Poor's

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