Anticipation…
Another quiet day expected as the market watches with anticipation the results of today’s presidential election. Yesterday was Q-U-I-E-T as we had a 1200-point range.
This morning, S&P futures were trading down 450 points at 1442. Yesterday produced the highest settle in one month for the SPZ at 1446.50. We are still below our major moving averages, but are gradually making up ground as the 100- and 200-day reside between 1480 and 1484, while the 50-day is at 1451.50.
We continue to think that 1468 is a reachable target on this move, as the markets continue to build a base at higher levels while making small inroads to the upside.
For today, if anything is going to happen: we have a zone between 1448 and 1452.50. If the market gets above 1452.50, there is a strong potential for a run to 1462. Along the way, 1456-1457 is resistance. Also, 1460.50 to 1463 is a resistance band. Anything above this, we’re looking for our 1468 target.
On the downside, we have an area between 1443.50 and 1441. If we get below this zone, there is a good chance for a trade down to 1427.50 — eventually. In other words, this is what the pattern tells us. However, in light of the external events, this may not occur.
We have support between 1427 and 1435 and under that, 1431 all the way down to 1426. If the market were to trade below 1421, there is a good chance we will take out the Halloween low of 1415 and trade down to 1410.
One thing about the upside and the downside: these patterns will hold true until we break out of our current tight range. These same numbers will work until the market makes up its mind.
Our Morning Pivot is 1441.50 to 1442.50.
As for the NASDAQ, a little more interesting things going on. We’re currently trading off 40 at 3291. Cisco
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PowerRating) gave a mixed earnings report. The stock was initially trading $4 lower, but made a reversal during the conference call, and is now called to open only $1 lower.
However, the impact of CSCO earnings and reduction of inventory statement, made on the conference call, is affecting other companies significantly: PMC-Sierra
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PowerRating) called to open $12, and that is a top 20 stock in the NASDAQ 100.
The NASDAQ Globex low is 3280, which is lower than both Friday’s and yesterday’s session low. We have seen very good buying above 3250 in this market. Today could be a test to see if that buying will continue.
On the support side 3250 is critical. Below 3250, we’re looking for 3200. Along the way, we have support between 3233 and 3225, then 3215 down to 3200. If the market gets below 3200, odds are we will move to 3130 and take back most of the Halloween rally. 3180-3165 is support. Any close below 3200 is a decisive negative.
We have resistance between 3310 and 3315, above that 3328 to 3335. If we get above this, look for the short-term pressure to be off and expect another move toward 3400. We have resistance between 3375 and 3388. Any settlement above 3400 is very bullish, and should lead to a move toward 3550.
The Dow touched 11,000 yesterday, which was the highest it’s been since September 10. This index is definitely getting the benefit of a Bush election. But in general, there are some strong fundamentals, as money continues to flow into these Old Economy issues. It does not appear as though this will change any time soon — or at least until the NASDAQ market becomes “hot” once again.