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Stock Market Technical Analysis for 10/29/2010

October 29, 2010

The markets once again got off to a strong start in the morning, only to see the move fade into a narrow and listless range by midday in yesterday’s session. That actually is how the indexes have been lurching through this earnings season.

We have had days that are largely flat, punctuated by gaps in the morning that then get filled. The result is a virtual flat line in all but the Nasdaq 100, which has seen fewer gaps filled.

Even though the NDX has outperformed the other indexes, the trend has been much flatter than what we might have seen in a typical week with strong earnings news. It is a peculiar situation in which any selloff is bought, but rallies are also sold down to near unchanged by day’s end.

Will the midterm elections on Tuesday spell a serious change, or perhaps the next Fed meeting? Depending on whom you ask, traders seem to think that either event will be the catalyst that will change everything.

The problem with that thesis is that, despite having positive catalysts handed to them on a platter lately, the bulls haven’t made much of them. We will just have to wait and see if November will lead to true clarity.

As a result of the relative inaction yesterday, levels once again have not changed very much. The Nasdaq 100 gets new resistance, only by a hair.

Neither the S&P 500 nor the Russell 2000 saw enough action to move levels beyond a minor update for support.

Nasdaq 100 (NDX)

First support is at 2097.73. First resistance is at 2131.08.

For the Nasdaq 100 Index Tracking Stock (QQQQ) first support is at $51.50. First resistance is at $52.39.

S&P 500 (SPX)

First support is at 1180.57, the 10-day moving average. First resistance is at 1197.50.

For the Standard & Poor’s Depository Receipts (SPY) first support is at $118.13, the 10-day moving average. First resistance is at $119.03.

Russell 2000 (RUT)

First support is at 690.11. First resistance is at 710.64.

For the iShares Trust Russell 2000 Index Fund (IWM) first support is at $68.95. First resistance is at $71.14.

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