Waiting on Greenspan

On Wednesday, positive comments about the economy from the Fed chief should help prices move higher

From Cherney Market Analysis

IBM (IBM ) delivered, it is now Intel's (INTC ) turn to produce numbers and guidance to inspire buying. Additional upside appears likely until all the buyers have been satisfied.

Greenspan has his meeting with the House Financial Services Committee on Wednesday, then the Senate Banking Committee on Thursday. I think that he will maintain his measured pace approach to rate hikes (not hint that we are near the end of the tightenings). But I also think that the markets have changed their view of the economy and have embraced a new reality: positive comments about the economy from Greenspan should help prices move higher.

I don't argue with the markets. They're going up and I don't stand in front of moving freight trains expecting them to stop just because I'm on the tracks. The markets have not delivered anything to me to suggest that upside is over. It is possible that prices got one day ahead of themselves on Monday, and Nasdaq 2170.99-2192 is a natural spot for a rest, but so far, I haven't seen anything that raises red or yellow flags.

I think part of Tuesday's advance was a discounting of good numbers from Intel (buyers were inspired by IBM's report) and market participants speculated on the future. Part of Wednesday's "future" that might have been discounted by some of the advance was a good report from Intel, so, this is a natural spot for an opening lift and then a pause sideways inside resistance. But at this point in the rise, it would take price moves below Nasdaq 2144.78 or S&P 500 1221.13 to break the bullish spell. I don't know what Intel will produce, but they could beat analysts' estimates, drive prices higher at the open and that could be a bell-ringer for short-term profit-taking that could cap the upside intraday.

I think the lack of volume might cause sideways trading after this week or next week, but right now, I do not have technical evidence of weakness.

Immediate Intraday Supports:

• Nasdaq support: 2167-2154.36, then 2149-1236.37, stacked at 2137-2124.88; this makes the 1237-1236 area a focus of support.

• S&P 500 has immediate intraday support at 1226.07-1224.70, stacked at 1224-1219.80, then 1220-1214.69


• S&P 500: 1229.12-1233.16. Tuesday's close above 1229.11 is a short-term bullish event; the next resistance is from all the way back in the spring of 2001 at 1232-1286.62 with a focus of resistance 1249.23-1267. A test of this focus is now possible.

• Nasdaq: 2170.99-2191.60, then thick resistance at 2263.75-2328.05.

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