By Paul Cherney The CBOE's Equity Only P/C ratio as of 4:00 p.m. EST was

0.76. I use end of day readings of 0.75 and higher to

alert me that we are close to some sort of a tradeable

short-covering rally, but my ideal recipe for a

capitulation in this market would be an end of day Total

CBOE put/Call ratio of greater than 0.99 accompanied by

large NASDAQ volume of 2.4 billion shares.

I have not seen the kind of capitulation volume I would

like to see in the NASDAQ to signal a tossing of the

towel, but if NASDAQ prices drop below the 2000 in

Monday's session, I would have to guess that plenty of

stalwart bears will use that event as a mandate to take

profits by closing out open short positions (buy to

cover).

Monday is going to to be a little tricky because this

bear market in the NASDAQ has not given bullish

performances on Mondays following down Friday's; quite

often the last of the selling can be pushed off until

Tuesday morning. Intraday readings of volume and price may

offer insight in Monday's session. There are addtional

complications in that next week is the week of the Triple

Witch which adds to the potential for volatility.

Immediate resistance for the NASDAQ is 2084-2124.

Resistance becomes thick in the 2159-2239 area. There is a focus of resistance 2188-2204. (Additional resistance

levels for the NASDAQ remain 2249-2287, then 2314-2351.)

Choosing NASDAQ support levels is difficult because the

index has traveled back in time by more than two years and

the older the price formation the less likely it is to

provide viable readings. NASDAQ prints sub 2000 should

start some short-covering but I would prefer to see

excessive P/C ratios at the same time.

I expect prices to

drop at the open, move under 2000 and then some

short-covering could start. I'll call chart support

2058-1924 There is a focus of support 2036-2000 (which

means that we might not see a sub 2000 print). For

Fibonacci fans, the .618 retracement from the NASDAQ's

record high close is near 1928. The .618 retracement from

the intraday high of 5132.52 is 1960.62

The S&P 500 has immediate resistance 1240-1253.

Considerable resistance starts with prints of 1264 and

higher, then the 1274-1293 area.

Immediate S&P 500 support 1224-1214 (actually all the

way down to 1206).

Anytime prices move above a layer of resistance, that

layer is then considered support. Anytime prices move

below a layer of support, those prices are then considered

resistance. Cherney is Market Analyst for Standard & Poor's