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It was another week of huge swings. Last weekend, in my Market Forecast (Please log in first, if you haven’t; you can sign up for a FREE account if you don’t have one), we looked at the support and resistance levels:
“Next week, we have the presidential election on Tuesday, Nov 4, which could provide impetus for the market to move. On the bearish side, the 20-day MA and 10-day MA now could serve as immediate support levels; breaking these could lead to testing of SPX 850 and Nasdaq 1500. On the bullish side, the 30-day MA becomes the immediate resistance. SPX 1000 and Nasdaq 1800 are important levels to watch, which could coincide with the 30-day MA next week. Breaking above these could lead to the daily upper BB.”
Indeed, the market tested both the support and resistance levels within the same week! Before the election, the market held things up well. On Tuesday, SPX and Nasdaq tested the 30-day MA and SPX reached that 1000 level. I said on Tuesday night, “SPX and Nasdaq are both testing their 30-day MAs. SPX closed above 1000. These are the initial resistances that we look at this weekend in my Market Forecast. So, we have to be careful here. VIX intraday charts are nearing bottoms, but, have not bounced.” Right after the election, on Wednesday, the market locked in profits and dove straight down; and, VIX bounced! The selling continued on Thursday, as the Dow gave back 1,000 points in 2 days! The market came back up on Friday, but, still closed below the 10-day MA.
SPX
SPX added +16.11 points to close at 930.99. It closed just below the 10-day MA. The MACD was flat.
Nasdaq
Nasdaq gained +38.7 points to close at 1647.4. It closed just below the 1650 leve. The MACD was higher slightly.
Both SPX and Nasdaq closed just below their respective 10-day MAs, although the 10-day MAs turned up. For the new week, the danger of retesting the lows (SPX 850; Nasdaq 1500) is still there…
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