Market Update - 11/2/2010

Surprisingly enough, we did not make new highs today on the SPX and Dow. The Nasdaq Composite came within 40 cents of breaking its April highs. As I have been saying since last week, the market is at a very critical level right now. Despite the up move today, we are still in this "indecision" range that has been going on for nearly 2 weeks, and until we can get a close outside of the range, whether it be above or below, the market will be range bound.

The SPX really looks like it wants to challenge the 1202 area. If this was to happen, either the Dow or Nasdaq, perhaps even both, could possibly take out the April highs.

Going into tomorrow, 1196 and 1202 are the key upside pivots. 1177 is now the key downside pivot.

With tomorrow being the all important FOMC Announcement, you can expect the market to have some big time fireworks after the announcement at 2:15 PM EST. The market has been waiting on this announcement for months, because tomorrow is supposedly the Fed's announcement on Quantitive Easing part 2. A very big monetary policy issue which could send the markets flying in either direction. It is nearly impossible to predict how the market will react to it.

The way I see it though, the real reaction to all of this could come next week. With the Fed Announcement being tomorrow, and Unemployment numbers on Friday, the market may wait until next week to reveal itself. Either way, expect some violent swings tomorrow and perhaps later in the week.

A couple of weeks ago I posted a chart of all the gaps the SPX has unopened from this move up since August.

There are now 6 major unopened gaps that should not be there.