The current oversold bounce should be able to linger sideways for a few trade days. I think there should be a positive bias, but in my view of the markets, significant upside looks doubtful and profit-taking/consolidation should cap price advances.
Over the next couple of weeks, I'm expecting consolidation of the gains we have seen, but at this time I do not have enough evidence to become concerned about a dramatic sell-off. Consolidation sideways seems likely until there is something more convincing in technical measures.
For the S&P 500, I would become concerned about a shift in sentiment if the index posted a close below 1219.80, but what can happen is that money can start to seek refuge in the larger caps, and that can create a sideways market as money searches for the next hot sector. Until I see something more declarative, I will guess that we could see a trendless succession of mostly sideways prices as money jockeys position out of one group and into another.
The nature of the S&P 500 chart makes it doubtful to me that there can be a huge drop, but conditions right now are not strongly positive either.
NASDAQ immediate resistance is 2177.85-2185.56, then 2189-2207.79, resistance is well-defined (strong) 2201.91-2207.79, then 2211-2249 with a focus 2211-2233.33 resistance gets thick 2225-2233. Anytime immediate resistances are exceeded, they convert to supports until proven otherwise.
S&P 500 intraday resistance is 1227-1232.28, overlapped at 1229-1239.76. This has been a stair-step period; there are multiple layers of resistance above current prices. A combination of several intraday plateaus creates a focus of resistance at 1238-1241.73, but resistance runs all the way 1245.81. The next focus of resistance above 1245 is 1249.23-1267.
With the current technical readings, I think the NASDAQ could only make a token visit to prices above 2185, but if the index moved above 2195, another leg higher should unfold. I do not think that will happen, but if it did, I would have to admit I was wrong and accept the reality the market shows me. I do not think the S&P 500 can get above 1238-1241.73, but if it does, I AM WRONG about sideways prices and a small leg higher should unfold.
NASDAQ supports are stacked, and it is usually difficult for prices to drop through stacked support unless there is a headline of undeniably bearish (or sentimental) impact. The index has support 2167-2144.78. a move below 2144 does not find the next well defined layer of support until 2106-2076 (very strong and should hold if tested). The NASDAQ had its close below 2165.44 on Monday, and that suggests to me that the buyers are less willing to make two-fisted commitments to the long side, but that does not necessarily mean that prices have to make a dramatic fall.