More Downside Ahead?
By Paul Cherney
Price action on Thursday is probably going to be in reaction to Yahoo's (YHOO ) earnings report and guidance, scheduled for release after the close of trading Wednesday.
There was late-session selling on Wednesday. This can easily be followed by additional weakness for the next session. On a purely technical basis, I would expect some weakness in the Nasdaq for Thursday and a negative close, but I also recognize that Yahoo's earnings report will be the focus of attention and will influence the trading to a great extent.
There should be a positive underlying trend in place over the next couple of weeks, but that does not mean that every day sees plus signs in front of the daily price changes for the major indexes.
Resistance: The S&P 500 has immediate intraday resistance at 1010-1015.33. The bigger picture of resistance, which was established by price action in June, 2002, is that the S&P 500 has a band of resistance at 1008-1041 with a focus of 1020-1031.
The Nasdaq has immediate resistance at 1722-1748 (it actually runs all the way to 1758.18 after Wednesday's intraday action). The next layer of resistance is 1778-1829.58. There is a gap in the price chart which runs 1778.80 to 1796.46, which was created by a downward gap at the opening on Apr. 22, 2002. Sometimes the first print inside a gap like this will draw sellers.
Support: The Nasdaq has immediate intraday support at 1735-1713, then 1715-1693, which makes the 1715-1713 area important support. Additional support is 1684-1600.
Immediate intraday support for the S&P 500 is 1005-996.94, then 990-984.80. There is a big band of support for the S&P 500 at 992-963.25.
Cherney is chief market analyst for Standard & Poor's