There was a lot of selling on Tuesday, Feb. 4, which really did not drive the markets appreciably lower. Wednesday, Feb. 5, is shaping up with the potential to see some relief from the selling and a squeeze of shorts is possible.
The intraday chart pattern for both the Nasdaq and the S&P 500 were potential ABC patterns with potential breakout (bullish breakout) points of 848.37 for the S&P 500 and 1310.48 for the Nasdaq.
The Nasdaq has immediate intraday support at 1298-1265 with a focus of support at 1298-1280.
The Nasdaq has immediate intraday resistance at 1336-1345. The index has substantial resistance at 1358-1383.
The S&P 500 has a small shelf of support at 848-835.
Immediate resistance (intraday) for the S&P 500 is 857-868.62. Immediate resistance becomes thick at 862-868.72. Substantial resistance is 876-890, and if there is a rebound from short-term oversold conditions, that is a likely spot for the rebound to run out of upside momentum. Cherney is chief market analyst for Standard & Poor's