Markets Won't Stay Fired up

By Paul Cherney Friday is options expiration. Quite often, most of the

sound and fury has already taken place before the

expiration day. An opening surge in volume and a lift in

prices might not find much in the way of followthrough.

At this time I don't think the markets can establish an

advance which just keeps going and going without looking

back because there are still too many valuation concerns

which should keep some conservative money on the

sidelines. The Fed has already made it's fifth rate cut,

the historical records are clear; at the one year

anniversary of a fifth rate cut, neither the NASDAQ nor the

S&P 500 have ever closed lower than they were on the day of

that fifth rate cut, so with a one year time horizon, the

downside is limited, too.

Immediate support for the NASDAQ is now 2171-2156 then

2125-2109. The NASDAQ has established a well-defined wall

of resistance in the 2187-2233 area. This is part of the

broader band of resistance in the 2174-2233 area. The next

layer of resistance above 2233 is directly overhead in the

2242-2356 with a focus of resistance 2253-2310. Unless

there is a headline of undeniably bullish importance, I

think that the best the NASDAQ can do on this short-term

advance (the next couple of trade days) is a print at or

above the 2233 level. Downside is limited.

The S&P 500 has immediate closing support in the

1273-1253 area. There is a small shelf of resistance in the

1288 area, which is where the index closed on Thursday. The

next substantial resistance does not occur until 1300-1341.

A likely spot (short-term) for this initial leg up to run

out of momentum is prints in the 1311-1339 area. Cherney is Market Analyst for Standard & Poor's