There has been enough of an improvement in the technicals that the line of least resistance must be considered to be for higher prices. That does not mean that prices will necessarily head higher on Wednesday. Upside will probably be a struggle, but the price pattern of the past week has confirmed that there is buying support directly under current prices.
There is a peculiar price pattern which has evolved over the past couple of years, if you look at S&P 500 price changes on the day of an FOMC announcement gains are followed by losses on the next day and vice versa. It has happened eight out of last ten FOMC announcements.
The Nasdaq has had a close above 1675 and the S&P 500 has had a close above 985.75, so I have doubts about concerns for an S&P 500 test and possibly a close in the 948-912 area of support.
Resistance: The Nasdaq has immediate intraday
resistance at 1666-1675.46; an intraday move above 1675.46 should generate follow-through for a test of the next layer of resistance, which is 1687-1723 with a focus at 1695-1703. The Nasdaq has major resistance at 1722-1758. Inside this layer of resistance is a focus of resistance at 1737-1753. I think it would take a headline universally recognized as bullish to move prices up to the 1690 or higher area.
Immediate resistance for the S&P 500 is 984-991. The S&P 500 has brick-wall resistance at 988-1015.41. Its focuses of resistance are 993-1000, 1005-1008, and 1010-1015. 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 at 1020-1031. If you look at the overlap of resistances, the 1008-1015 layer is the immediate stumbling block for S&P 500 prices.
Supports: The S&P 500 has
support at 985-974 and 976-960.84. I cannot rule out that sometime before the middle of September that 949-912 support will be tested, but for right now, prices have stabilized and there is a positive bias in place. The S&P 500 still technically has a small chance of printing under 950. These markets have not seen a one-third or a 50% retracement for the move up since March's lows, and retracements like that are common, but in the short-term, prices have stabilized, and for now, it looks like prices should edge higher.
The Nasdaq has immediate support at 1676-1666, then 1652-1640 and 1643-1623; this is within the broader 1648-1597 layer of support. Cherney is chief market analyst for Standard & Poor's