Signals Remain Positive

But more sideways action is likely as the markets await the election

By Paul Cherney

Technical measures remain positive, but as explained yesterday, the buying surge on Wednesday used up a lot of short-term demand. More sideways price action appears likely for Friday.

Here are intraday support levels: Nasdaq, 1,960-1,954.29; S&P 500, 1,120.96-1,117.14. I do not expect these prices to be undercut, but if the Nasdaq 1,954.29 or S&P 500 1,117.14 levels are undercut for more than 4 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. For the S&P 500 a test of the 1,111-1,108 area would be possible.

But, immediate supports are stacked and a dramatic decline would probably require a headline everyone recognizes as bearish. More sideways action is likely as the markets await the election.

Chart support for the Nasdaq is 1,957-1,934. This chart support along with the overlap of the intraday support mentioned above makes a focus of short-term support at 1,957-1,954.29. Next support is 1,927.51-1,914, then 1,916-1,906.

Chart support for the S&P 500 is 1,119-1,111; the 1,119-1,117 area remains a focus of support. Next organized support is 1,108-1,098.

Resistance for the Nasdaq: there is a small shelf of resistance right at current prices -- 1,972-2,006.58. This is all part of the 1,960-2,055 band of resistance.

The S&P 500 has resistance at 1,127-1,142.05, with thick resistance at 1,132-1,142.05 (a likely stall zone). Next resistance is 1,147-1,163.23; there is a focus of resistance at 1,147-1,150.57.

Cherney is chief market analyst for Standard & Poor's

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