Sharp Selloff
A sharp selloff in the stock index futures markets on the heels of the latest news on the election, this time the Florida Supreme court ruling on the recounted votes. S&Ps were trading down 1170 at 1344 this morning.
For today, we continue to think the key to the market is the 1351-1353.50 area. Over the last two days, this has been the most heavily traded zone. How the market responds at this zone will be critical for the next move, either up or down. Obviously, this morning this level will be resistance.
This will also be our second down-gap open on the week. We have support between 1343 and 1345. If we trade below this, this week’s low and last week’s low should provide support, ranging between 1337 and 1335. If we get below 1335, the odds are strong for a move to 1328, and more probable will be a test of the Oct. 18 recent contract low of 1324.80.
On the upside, we have a cluster between 1347 and 1348.50. If we get above this, our zone that we outlined earlier comes into play. If we can get above that zone, we should trade to unchanged first at 1355.70. The market then has a major resistance zone between 1363 and 1365.50.
If we get above this zone, we think any trade into the 1370s will cap the run on the upside, especially considering that we have major resistance between 1373 and 1377. We are not anticipating the market to trade through the 1365.50 resistance zone.
NASDAQ — another day, another new low settle. As for today, we’re called to open 4750 lower at 2760. We made a session low in Globex of 2726. Keep in mind our day-session contract low is 2755.
We see support between 2738 and 2730, then 2718 down to 2705. Below that, look for 2650. Along the way, 2680-2672 is light support. Bear in mind that limit down comes in at 2712.50. We would be extremely surprised to see any move below the 2650 level.
Resistance is at 2780 up to 2795. Keep in mind there was a lot of trading late yesterday afternoon between 2795 and 2785. Above this, 2807.50 will fill the gap, and then above that 2820 to 2830 is resistance. Above 2830, look for 2865 to trade. We have resistance between 2850 and 2865.
As for the Dow, keep an eye on the financials as they will most likely be the key to the next leg. As for the index itself, same thing as yesterday: As long as we close above 10,400, it will keep the short-term pressure in line.