Downside appears limited, but so does the upside ahead of the uncertainties of earnings warning season.
Wednesday's action in the Nasdaq has established a band of immediate (intraday) reisstance in the 2230-2250 area. The end of day charts peg resistance in the 2247-2282 area. Volume was not really supportive of a move higher in Wednesday's session as the total trading volume for the day was less than Tuesday's 1.8 billion.
The Nasdaq has a small layer of support 2197-2194 which should produce some sort of a rebound the first time it is tested. However, once the bounce runs out of momentum (if there is a bounce) then the 2194 becomes critical intraday support and the next time prices move below 2194, downside risk opens for prints 2167.24-2150. (Any print below 2194 opens downside risk for prints in the 2167-2150 area, but with this particular chart pattern the first move to the 2197-2194 level should produce a bounce.)
The S&P 500 is testing immediate resistance in the 1253-1295 area. Tuesday's intraday price action has established a small but importaant shelf of resistance (intraday) in the 1284-1286.62. Immediate support is 1283-1270. Then 1265-1254. Cherney is Market Analyst for Standard & Poor's