Uncertainty
Uncertainty of the political kind is impacting this market, with S&Ps trading down 400 points at 1409.30 this morning — sitting right above one of the key areas of the day at 1408.50.
On the upside, we see 1410, 1411.50, which was yesterday’s low, 1417, 1419, 1421.50, 1425 and a big cluster between 1427 and 1429. To get out of trouble, we have to get back above 1427. On the downside, we see 1408.50, 1406, a major at 1403, 1400.50, 1398.50, and a critical area of support at 1393.50.
S&Ps were pulled down yesterday when the NASDAQ got hammered. Add to that, of course, the uncertainty of the election.
The NASDAQ was trading down 50 handles at 3011. This is coming off a day in which we lost 253 handles. Support should be at 3035-3025, then 2975, which is our intraday October low. We have support between 2985 and 2970.
If this is exceeded, the first stop is limit down, which comes in at 2966. Next stop, should be 2902.50, which is our low for the year.
Keep in mind that this is based on the futures — not on the cash. The cash is in a different situation because of the way the index is calculated. Our key for the cash is what we outlined yesterday afternoon: 3038 to 3076. We closed yesterday in this zone at 3059 in the cash.
If we break out of this zone, it targets a move to 2950, which will take out our October cash lows of 2956, and then more importantly it should make a move to and through the low for the year which was made May 24 at 2897.
At 2902.50 in the futures, we target the cash to be trading through its low for the year. If this is exceeded, 2850 is the target for futures. We have support between 2855 and 2840. Resistance is 3080 to 3095, above that 3130. We have resistance between 3125 and 3135. If the market gets above this area, look for a short-covering rally with a trade up to 3225. Along the way, 3185-3200 is resistance.
The Dow continues to hold up extremely well, due to money flows. A small sell-off at the close took it from postive to just down 45 points. If the market does sell-off we want to be buyers of the Dow between 10,700 and 10,550.