Stocks Stand Their Ground

The resilience in the market demonstrated on Thursday leads to expectations of higher prices on Friday

By Paul Cherney

From Cherney Market Analysis

The June employment report will be released at 8:30 a.m. ET on Friday. I think the markets want to see a strong nonfarm payrolls figure. The Street expects a gain of 190,000 to 200,000, something more than that should add to the resilience demonstrated in Thursday's markets. I don't know what the nonfarms number will be, and the number certainly has the power to move markets, but the resilience in the stock market demonstrated on Thursday makes me expect higher prices on Friday. I think a nonfarms number above 225,000 would send bears scrambling to cover and bring some buyers in off the sidelines.

Thursday's headlines out of London force a comparison with the Madrid train bombings of March 11, 2004. The day after March 11, 2004, the S&P 500 and the Nasdaq had closing gains. The Nasdaq gained 2% and the S&P 500 gained 1.3%. History never repeats in lockstep, but there certainly is precedence for higher prices on Friday.

Immediate Supports:

• Immediate intraday support for the Nasdaq is 2,072-2,064.01. Prints below 2,064.01 for more than 4 minutes would increase the chances for a move to test 2,060-2,050. Next support 2,047-2,027.

• The S&P 500 has extensive sideways supports, which makes it unlikely that the index will show a dramatic decline. S&P 500 immediate intraday support is 1,193.20-1,190.09. The index has a band of support at 1,194-1,183.55. The index has strong support at 1,178-1,158.

Immediate Intraday Resistances:

• The Nasdaq has immediate intraday resistance at 2074.30-2085.04, with a focus of resistance at 2079-2085.04. Next intraday resistance is 2089-2112, with a thick layer at 2089-2095.

• Immediate intraday resistance for the S&P 500 is 1199.03-1203.50, then 1206-1208.84. Prints above 1208.84 for more than 4 minutes open the upside for tests of 1212.00-1219.10.

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Cherney is president of Cherney Market Analysis

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