There is probably a little reluctance to commit to the longside ahead of the Dec. 8 deadline when Iraq is supposed to declare all unsanctioned weapons.
I am going to mention this because it is on the intraday charts. The Nasdaq 1441.12 level represents a "line of death" on the intraday charts. Usually (when I look at daily bars), the first approach or undercut of a line of death prompts some short-covering. In the daily bars (and in a market more volatile than this) the rebound in prices is swift. When intraday lines of death are tested the rebound is often not as convincing. The main point here is that if the Nasdaq prints 1441 there could be some short-covering, but if the rebound in prices cannot overcome Nasdaq resistance at 1461.99-1468.54, then the next pass down under 1441 should garner followthrough selling and downside risk opens for prints 1426-1407.
Glossary: A "line of death" is the lowest price point in a sideways consolidation. A pre-requisite for a "line of death" is a sharp (asymptotic) rise in prices and then just a sideways consolidation pattern. The truly important "lines of death" occur after a multiple week (or month) uninterrupted trend higher which finally reaches price levels where buyers and sellers meet in equilibrium (that's why prices just move sideways in a consolidation). The line of death is the lowest price point established during that sideways consolidation. It represents a "towel toss" level for the people who went long during the consolidation and it also represents a "take profits" point for the people who shorted near the top of the sideways consolidation. The first test of a line of death often produces a hard, fast rebound. My theory is that the first test of the line of death usually produces a rebound in prices because it represents the bears who were playing the trading range and when prices reach the bottom of the range, they are happy to take all or some of their short-side profits by buying to cover. Oftentimes, (in a generally bullish market), their buying turns the market up for another trip to the upper edge of the band of consolidation, but, if the lift generated by the short-covering at the bottom the consolidation (at the line of death) fails to generate followthrough buying and prices rollover and pierce the line of death again, then bulls who had gotten long during the consolidation give-up on the long-side and sell, adding to the downward pressure.
Support: The S&P 500 has multiple stairsteps of support within the broad 926-867 area. 915-907, 910-904, 897-887.
Immediate Nasdaq support is intraday 1468-1441 with a focus 1459-1448 then 1426-1407.
Resistance: The S&P 500 has resistance 932-965. Immediate intraday resistance is 932-944.
The Nasdaq has resistance 1474-1506 and 1492-1568 which makes the 1492-1506 area a focus of resistance. Cherney is chief market analyst for Standard & Poor's