Positive Bias for Prices
By Paul Cherney
Tomorrow (Thursday, June 3), might see more of the same trading action. The markets will probably not be able to trend much in either direction in cautious anticipation of the May employment report on Friday and Intel's (INTC ) mid-quarter guidance on Thursday.
Keep it simple: Until there are signals which indicate otherwise, assume a positive bias for equity prices.
On May 25, 2004, there was a bullish price breakout of a short-term trading range. A measurement of the Nasdaq price range of 1,865 to 1,938 -- 73 points -- added to the 1,938 level equals 2,011; this calculation is how some chartists would create an upside target for the Nasdaq. The same calculation performed on the S&P 500 would equate to an S&P 500 level of 1,136. There has not been sufficient contrary evidence to suggest that these target assumptions are unattainable. There is no time schedule for these targets.
Immediate intraday resistance for the Nasdaq is 1,989-2,009.11.
Immediate intraday support for the Nasdaq is 1,984-1,972, with a focus at 1,981-1,978. Supports are stacked: 1,975.66-1,967.40, which represents a focus of support. There is another layer of support at 1,971-1,957.58. That makes the 1,971-1,967.40 area thick support. Additional support is 1,934-1,913.73, then 1,918.08-1,899.85, with a shelf of support 1,918-1,914.
Immediate intraday resistance for the S&P 500 is 1,123-1,129.25. The S&P 500's next layer of resistance above 1,129.25 is 1,135-1,149.
Immediate intraday support for the S&P 500 is 1,116.71-1,109.91 with a focus inside this zone at 1,116-1,112.71. The index has a small shelf at 1,109.04-1,106.10, then substantial support 1,100.72-1,090.74.
Cherney is chief market analyst for Standard & Poor's