By Paul Cherney Most of my measures of the market address extremes, and right now there have not been any extremes.
A mildly positive bias has been in place and as long as the VIX (market volatility index) continues to close below its 10-day exponential moving average, assume sideways with a positive bias. On Thursday, near the close, the VIX's 10-day exponential was near 31.73.
One of the problems facing the markets right now is the sentiment, as measured by the Investor's Intelligence polls of newsletter writers. The Bullish newsletter writers are over 50%, at 50.5%, and the Bearish newsletter writers are under 25%, at 24.2%. There are exceptions, but markets tend to move sideways under these sentiment conditions. If it weren't for the positive seasonality I would expect that we would have to move lower before anything significant to the upside could unfold.
Both the Nasdaq and the S&P 500 have sturdy bases of support, those levels are Nasdaq 1425-1317, S&P 500 926-867. I do not expect these levels to break.
Support: The S&P 500 has multiple stairsteps of support within the broad 926-867 area. Immediate intraday support is 897-887 and 891-872.
Immediate Nasdaq support is 1388-1367 with a focus of support 1387-1378. Next definitive support is 1347-1317.
Resistance: The S&P 500 has resistance at 932-965. Immediate intraday resistance is 915-926.27, then 932-944.
The Nasdaq has immediate resistance at 1407-1426. Cherney is chief market analyst for Standard & Poor's