By Paul Cherney Intermediate term technical measures are negative, but that doesn't mean that there can't be a short-term rebound from oversold in Wednesday's session.
The big problem the markets face is that the expectations for really improved earnings simply aren't being announced by many of the big tech companies.
The Nasdaq is now reaching into the lower edges of the intermediate term support at 1965-1853. There is a band of price traffic in the 1887-1853 area and on this leg lower, I think this area should be able to contain prices. There is a focus of support within this zone at 1883-1867 and that looks like a likely spot for some short-covering and bargain hunting which has the potential to produce a one- to a one-and-a-half-day bounce.
I have an intraday pricing model based on Nasdaq price action which is projecting that if the index is printing 1901.30 or higher as of 10:31am ET on Wednesday, then the odds shift to favor a short-term oversold rebound. The Nasdaq has immediate resistance at 1890-1909. Considerable resistance is at 1922-1985.83, with a focus of 1942-1965.
The S&P 500 index has immediate resistance at 1123-1129, then at 1138-1151, which is part of a broader band of resistance at 1138-1159. The index could easily test the well-defined intermediate term support in the 1111-1052 area sometime on Wednesday morning and then establish a floor for an attempt rebound from short-term oversold conditions. Cherney is market analyst for Standard & Poor's