Election week buying has managed to undo much of October's selling, but for all the enthusiasm it doesn't change the broader consolidation which is an index caught between Autumn peaks and swing lows. Technicals for the Nasdaq returned to a net bullish picture but the index now finds itself back at - what had looked to be - a double top. As J.C. Parets has noted, how many times do you see a triple top? Not very often, so we must consider this test of resistance is part of a larger move higher. 

Buyers made a return to markets before heading to the polls. There wasn't a whole lot of volume to today's action but it was enough to mark the action of the previous few days as a possible swing low.  The S&P was one of the stronger indices in its reaction off support. However, it now finds itself coming up against resistance of its 20-day and 50-day MAs. On a positive front, there was a 'buy' trigger in On-Balance-Volume, albeit a weak signal from a flat-lined trend. Relative performance was skewed heavily away from Large Cap stocks. 

With the election fast approaching we see the tension express itself in the market with an increase in volatility.  The direction of the popular vote may be known, but its hard to see the result on Wednesday as been considered final - at least as long as Trump doesn't win. The vote will tighten on Tuesday and only a blowout will prevent the legal wranglings to follow. None of this makes for comfortable reading for the market, and this uncertainty is coming to a head. The September bounce has faded, but the S&P is able to find support support at the September swing low, suggesting buyers are willing to step in to support the market. Friday's selling marked itself as confirmed distribution, so while there are buyers it may yet be sellers who take this beyond support and maybe into a test of the 200-day MA.  Technicals are all net negative, including what looks to be a trend reversal in on-balance-volume after a summer of accumulation. 

Media sources blamed increasing Covid19 cases for today's selling but this is hardly news. Up to now, the selling has been consistent but today saw things accelerate to the downside which left difficult breakdown gaps behind.  What this means in broader terms is of instead of looking at a rally continuation we need to look at a broader consolidation.  The Nasdaq is on course to testing the September low but the gap now establishes a break to prior action. In real terms, today's action is not as damaging as headlines might suggest, but we are looking at a shift to a sideways consolidation. Even with that, there is a long way to go before long term support of the 200-day MA is tested - but it's not a buyers market.