There is an air of caution for many tech investors as they await Cisco's (CSCO
) earnings report and guidance due after the close on Tuesday (2/6), but the market had ample opportunity to head lower in Monday's session and the sellers didn't get panicked into parting with their shares. There is a good chance that Tuesday could postive closes for the Nasdaq and the S&P 500.
The Nasdaq is testing immediate
support in the 2644-2576.95 area. Unless there is a headline of undeniably bearish importance, I think this area will hold for Tuesday and any dip in prices into the 2630-2614 area should find buyers ready to move in. The next layer of support for the Nasdaq (which was briefly tested in Monday's session) is 2604-2576.
resistance is 2686-2743.
The S&P 500 is testing a focus of resistance in the 1353-1368 area. The index has broad and substantial resistance 1351-1389. The index has support in the 1350-1342 then 1335-1325.
Here is a worst case scenario for the next couple of trade days (I doubt a break of 2576 will unfold.) The Nasdaq's low print on 1/16/01 was 2576.95 and prints in this area (if they occur) should bring buyers to the market and reverse prices for a rebound BUT, if 2576 breaks, downside risk opens for prints below 2520. Cherney is market analyst for Standard & Poor's