The selling that hit the markets on Wednesday afternoon was selective selling, it targeted the big cap names. Why do I say that? At both the Nasdaq and the NYSE, there were more advancers than decliners.
The 10-day exponential
moving average of the VIX (market volatility index) was 22.45 very near the close of trading on Wednesday. For any price advance to command a sense of legitimacy, the VIX is going to have to move below 22.45.
Resistance: The S&P 500 has immediate intraday
resistance at 984-995 and 993-1003, which makes 993-995 an especially thick area of resistance. Next resistance is 1010-1015.12. The bigger picture of resistance which was established by price action in June, 2002, is that the S&P 500 has a band of resistance at 1008-1041 with a focus of 1020-1031.
The Nasdaq has immediate intraday resistance at 1610-1620, then a shelf at 1623-1632.95. Additional layers of resistance are 1641-1660.47 and 1658-1669, which makes the 1658-1660.47 area especially strong resistance.
Support: The Nasdaq has
support at 1603-1584 which should support prices on Thursday.
Immediate intraday support for the S&P 500 is 982-972, There is a broad band of support at 973-947. A retest of the breakout point would mean prints at 965. Odds are 7 in 10 that the S&P will be higher as of the close on Thursday. Cherney is chief maket analyst for Standard & Poor's