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A Post-Election Pause?

By Paul Cherney The markets wanted a definitive outcome to the U.S. presidential election and many on the Street seemed to favor a Bush victory. Both of those events have occurred, but the opening rise in stock prices on Wednesday attracted sellers, not buyers, to the marketplace.

On Thursday, caution ahead of Friday's employment report will probably produce mostly sideways price action with a negative bias.

Longer-term end-of-day momentum measures remain positive but there were some divergences in price-momentum oscillators on Wednesday that often precede weakness.

Here are short-term important intraday

support levels:

Price weakness and Nasdaq prints 1,983 or lower would not be a surprise for Thursday. The Nasdaq's first layer of well-defined (strong) immediate support is 1,983-1,963, and the support becomes especially thick at 1,974.99-1,963.83.

Immediate support for the S&P 500 is 1,133-1,124.

Critical short-term price levels are: Nasdaq, 1,960-1,954.29; S&P 500, 1,120.96-1,117.14. If the Nasdaq 1,954.29 or S&P 500 1,117.14 levels are undercut for more than four minutes inside the trading day, that would increase the chances for weaker prices, and a possible test of the Nasdaq 1,937-1,926 area (not expected). For the S&P 500, a move below 1,117.14 would probably produce a test of the 1,111-1,108 area (not expected).

There is a big band of

resistance for the Nasdaq at 1,960-2,055. Within this band there are layers of resistance: 1,985-2,006.58, 2,017-2,039, with especially think resistance at 2,030-2,039.

The S&P 500 had resistance at 1,127-1,142.05 with thick resistance at 1,132-1,142.05, but now the next resistance is 1,147-1,163.23. There is a focus of resistance at 1,147-1,150.57, and the buying exuberance at Wednesday's open forced the S&P 500 up to print an intraday high of 1,147.60 before prices starting edging lower. This reinforces the importance of this resistance. Cherney is chief market analyst for Standard & Poor's

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