Sideways Action Likely
By Paul Cherney
End of day indicators which update real-time are still in twilight zones of neutrality which do not lend themselves to predictability. I can only expect sideways price action.
I feel compelled to repeat the question I had last Friday after the robust employment report could not force a buying panic: What is left to push prices higher? The complement of that question is: What is there to push prices lower? Not much. Right now, the balance between bulls and bears says sideways price travel to me.
The NASDAQ has a small ledge of resistance at 1967-1973.08 but the next layer of well-defined intraday resistance was established on Friday, Nov. 7 after the robust employment report; that resistance is 1978-1992.27 with especially thick resistance 1984-1989.31. I think it would take a headline to move prices appreciably above this 1992 level.
An additional layer of NASDAQ resistance is 1979-2011.25 which makes the 1979-1992 area a focus of resistance. Next resistance above 2011.25 is 2042-2073.
The S&P 500 does offer a little glimmer of hope that there is something more to the upside, it is currently inside resistance 1055.64 to 1062.19 with a focus 1056.94-1060.79. A move above the 1060.79 might generate enough upside momentum to scare some bears into covering shorts ahead of the weekend, but the S&P 500 has resistance established back in May of 2002 at 1058.67-1106.59 and inside this 1058-1106 area, there is what looks like Brick Wall resistance at 1068-1090: I think the first price move into this area will probably be repelled.
The NASDAQ intraday support ends at 1956 and a move under that layer might cause a little move lower, deeper into the stratified layers of sedimentary support, the first one is 1958-1942, so obviously downside risk looks limited. This is stairstep support, additional supports are 1949-1941 and 1939-1923.50. Next support under 1923.50 looks like 1906-1892 (not expected to be seen soon).
The S&P 500 has immediate intraday support 1055-1048.55. Stairstep supports are in place, the next supports are 1046-1043 and 1039.07-1029.19.
Cherney is chief market analyst for Standard & Poor's