It would be better to see prices fall at the open and then recover, but this would be just a short-term phenomenon. The markets are still grappling with tech valuation concerns, the legitmacy of numbers produced by auditing firms and the propensity of market players to take longside profits almost immediately (as opposed to the bull-market mantra of "buy the dip").
These markets are still treating short-term advances as selling opportunities. That is a simple sign that there are more potential sellers waiting to be satisfied (waiting to sell).
I think at some point, that there is going to have to be a huge washout, a traditional capitulation with an Equity Only Put/Call ratio of over 1.00 at the close and Nasdaq volume near 2.4 billion shares and NYSE volume near 1.7 billion shares, but not on Wednesday. For Wednesday, a rebound would be natural, with a positive close for the day. However, I would doubt that there could be a convincing follow-through higher (lasting weeks) without something resembling a washout of sellers.
Immediate resistance for the Nasdaq is 1691-1718, then 1713-1733, which makes the 1713-1718 area a focus of resistance.
The Nasdaq index has a broad band of resistance at 1736-1769. Major resistance is 1777-1832.
Immediate support for the Nasdaq is 1669-1599, with a focus of support at 1653.10-1630.80. If the Nasdaq were to print in this area (1653.10-1630.80), it would be a natural spot for bears to book profits (buy back outstanding short positions) and prices to rebound for the day. The Nasdaq's price gap was partially filled on Tuesday; the gap now runs from 1660.22-1653.10.
The S&P 500 has resistance at 1085-1089, then 1102-1114.73; there is a focus of resistance at 1105-1109.
Immediate intraday S&P 500 support is 1080.76-1072.64. The index has well-defined support throughout the whole 1087-1064 area. Cherney is chief market analyst for Standard & Poor's