Trend Lines, Support, Resistance for 10/6
Trend lines drawn from 9/3 (23d), 9/24 bottom (9d), 9/30 (5d) and today 10/6 (1 day).
The Nasdaq started off negative, then made good gains through the day, but sold off after news that Republicans will not pursue a stimulus package until after the election. That brought the index below the September support/resistance level, but still ended above the key 50d MA level. The unexpected ups and downs will continue at least through the election day. However, it's still important to have an expectation and come up with game plans for the potential moves.
If the index can recover the momentum from the 9/24 low, the trend would take it back up +2.84%. It would need to break back through September support/resistance, which it has done twice on good news. Otherwise, stopping at the resistance level would mean a +1.10% gain, which is where the 5d trend points.
A continuation of the 1d trend, which includes the sell-off, would mean a -1.12%. Further downside may occur as the market absorbs fully the reality of no stimulus until November.
Without the stimulus, there could be more downside as impacts are surfaced with economic news. I'm keeping the June Support line and the possibility of a future decline to that point on the map. There are only two days (July 1 and 2) filling the gap between June support and July support. A fall below July support would be significant.
The Nasdaq started off negative, then made good gains through the day, but sold off after news that Republicans will not pursue a stimulus package until after the election. That brought the index below the September support/resistance level, but still ended above the key 50d MA level. The unexpected ups and downs will continue at least through the election day. However, it's still important to have an expectation and come up with game plans for the potential moves.
If the index can recover the momentum from the 9/24 low, the trend would take it back up +2.84%. It would need to break back through September support/resistance, which it has done twice on good news. Otherwise, stopping at the resistance level would mean a +1.10% gain, which is where the 5d trend points.
A continuation of the 1d trend, which includes the sell-off, would mean a -1.12%. Further downside may occur as the market absorbs fully the reality of no stimulus until November.
Without the stimulus, there could be more downside as impacts are surfaced with economic news. I'm keeping the June Support line and the possibility of a future decline to that point on the map. There are only two days (July 1 and 2) filling the gap between June support and July support. A fall below July support would be significant.
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