Bulls, Bears in Balance

Prices might keep moving mostly sideways until the close of trading on Election Day

By Paul Cherney

Technical measures based on daily price bars remain positive, but right now there is a balance between buyers and sellers that might keep prices moving mostly sideways, maybe even until the close of trading Tuesday, Nov. 2 -- Election Day.

Here are short-term important intraday support levels: Nasdaq, 1,960-1,954.29; S&P 500, 1,120.96-1,117.14. This remains my view: 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 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; for the S&P 500, a test of the 1,111-1,108 zone would be possible.

Immediate supports are stacked and a dramatic decline would probably require a headline everyone recognizes as bearish.

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 below 1,111 is stacked at 1,108-1,098.

There is a shelf of resistance for the Nasdaq right at current prices: 1,972-2,006.58. This is all part of the 1,960-2,055 band of resistance. Inside this 1,972-2,006 layer is especially thick resistance at 1,985-2,000.

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.

At a minimum, the CBOE volatility index, or VXO, is probably going to have to undercut 15.70 (chart read) to suggest aggressive buying.

Cherney is chief market analyst for Standard & Poor's

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