More Gains Likely
By Paul Cherney
Higher closes are likely.
In the very short-term, Thursday could see some profit-taking.
The chances for a decline of real consequence do not appear likely. There was good momentum delivered by the move on Tuesday and this kind of a move usually has residual upside effects, so unless something changes in the technical measures, I don't think that the downside is huge over the next couple of days. It appears to me that downside will be greeted as a buying opportunity, but I cannot rule out a day dominated by sellers (maybe Thursday).
Nasdaq total trading volume for the Wednesday was 1.74 billion shares, which equals the minimum amount I would have expected to see ahead of a little profit-taking. For the NYSE, something near 1.68 billion total shares traded for the day would be a short-term concern.
Supports: Immediate supports are stairstep.
The Nasdaq has support at 1457-1453, then 1444-1439.
S&P 500 support is 914-909.69, then 907-904.
The substantial supports are 1426-1392 for the Nasdaq; S&P 500 substantial support starts at 911 and runs to 877 with especially thick support starting with prints of 896 and lower.
Resistances: S&P 500 resistance is 918-935, with a focus of 924-931. The next resistance is 951-965.
The Nasdaq has two focuses of resistance created by the price action near the January, 2003, top and the November, 2002, top; they are 1433-1467 and 1445-1474.69. These resistances overlap at 1445-1467. If there is a stall and prices retreat to find buyers at or above the immediate substantial support of 1426-1409, another leg higher, a new ABC pattern, could be forming which might ultimately test the 1495-1521 area.
Cherney is chief market analyst for Standard & Poor's