Will Stocks Find Their Feet?

There will have to be a basing process in the daily charts

By Paul Cherney

From Cherney Market Analysis

On a short-term basis, another little lift on Monday seems likely, but I still think there will have to be a basing process in the daily charts that should include a close or closes that undercut Thursday's closes. Those closes were Nasdaq 2084.08, S&P 500 1191.49.

There is probably going to have to be a basing process and until I see weekly measures of accumulation versus distribution either hit oversold, or show convincing accumulation, I will be reluctant to view rebounds as the beginning of a trend higher.

Short-term, we have seen capitulation style volume, and on a purely technical basis, Friday's bounce can see a little followthrough higher on Monday, but it will be closes that undercut Thursday's closes on less volume and a smaller numbers of new 52 week lows that will bolster confidence in expectation for a low that can launch a trend higher that lasts more than just a few trade days.

Immediate Resistances:

• The Nasdaq has intraday resistance at 2089-2110.77, stacked at 2115-2127.24. Next resistance is 2139-2167.00; resistance gets thick at 2149 and higher.

• S&P 500 intraday resistance is 1201-1210.34, then 1215-1222.

Immediate Supports:

• The Nasdaq has support 2106-2039 there is a focus of support 2087-2069.04.

• The Nasdaq has thick, well defined support 2075-2050 which makes the 2075-2069 area strong short-term support.

• The S&P 500 has immediate support 1206-1165 with a focus of support 1206-1182.24.

• Next meaningful S&P 500 support is 1173-1146.

Disclaimer: Use of the information provided by Cherney Market Analysis, Inc., is subject to the Terms of Use contained on its website, paulcherney.com.

Cherney is president of Cherney Market Analysis

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