By Paul Cherney Thursday's opvernight systems run produced a signal which has historically demonstrated 7 in 10 odds of seeing closes higher than Thursday's 2183.37 level for the Nasdaq (over the following 10 trade days).
Friday's intraday lows for the S&P 500 and the Nasdaq did not undercut yesterday's lows, and that's good, but the late day price performance was not encouraging because intraday gains melted away.
There was healthy volume on both the Nasdaq and the NYSE and both the Nasdaq and the S&P 500 are in likely chart locations for some sort of a rebound in prices, but if prices move below their recent intraday lows and stay there for more than 3 or 4 minutes without attracting buyers, then I would have to admit that I was wrong about a short-term rebound in prices and my concerns would focus on further declines in prices and expectations for a classic high fear, high volume plunge before I had any confidence in the upside for equities.
The Nasdaq finished Friday's session in a test of a layer of support: 2118-2094. The recent low pass has been Thursday's 2071.03 and if prices print below 2071 for more than 3 or 4 minutes without attracting buyers, then the downside risk opens and a capitulation could easily unfold.
Immediate resistance is 2166-2204 area, there is a focus of resistance 2188-2204 which stopped the intraday advance on Friday. Friday's intraday high for the NASDAQ was 2197.85. Additional resistance levels are: 2249-2287 area then 2314-2351.
The S&P 500 has immediate resistance in the 1240-1253 area, there is a focus of resistance within this area at 1241-1247. Resistance is stacked with the next layer 1253-1260. Considerable resistance is evident in the 1274-1293 area.
The S&P 500 finished Friday's session in a test of immediate support 1237-1214 area.
Cherney on the Markets will not be published on Mar. 5 and Mar. 6, but will return after the close of trading Mar. 7. Cherney is Market Analyst for Standard & Poor's