Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in the METAVERSE Stocks Universe - 8th Dec 21
Stock Market Sentiment Speaks: I Expect 15-20% Returns For 2022 - 8th Dec 21
US Dollar Still Has the Green Light - 8th Dec 21
Stock Market Topping Process Roadmap - 8th Dec 21
The Lithium Breakthrough That Could Transform The Mining Industry - 8th Dec 21
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Turning? Look For These Support Levels

Stock-Markets / Stock Markets 2020 Oct 29, 2020 - 02:17 PM GMT

By: Chris_Vermeulen


The breakdown in the US stock markets early on Monday, October 26, was more about investor expectations and a transitioning away from risk ahead of the US Elections than any other factor.  No new stimulus deal being reached in addition to a surge in US COVID-19 cases recently suggests another contraction in the US economy may not be too far away.  Additionally, as news bombs seem to be nearly an hourly event, investors and traders are suddenly much more uncertain of the outcome of the US elections which are nearly 7 days away.


There are three key factors putting downward pressure on equities today:

  1. Risk off: Risk capital is being pulled away from high-flying sectors in an attempt to eliminate excessive drawdowns as a result of extreme volatility throughout the election event.
  2. COVID-19 Cases Surge: Heading into the early Fall season, COVID-19 cases in the US are starting to rise again. This sets up the expectation that travel, consumer spending and all levels of consumer activity may take another hit just before the holiday season.
  3. Changing Expectations: As the election nears, skilled traders are suddenly realizing their expectations may not be as “solid” as many thought 30 days ago. This requires an immediate change in planning/structure.

These new environmental aspects related to the capital markets suggest that a “repricing event” is likely to continue before the November 3 election day.  The repricing event will likely attempt to test lower support levels in the markets – possibly attempting to reach recent Major Support levels. My team and I outline the support levels on the 240 Minute and Daily S&P 500 E-Mini Futures (ES) charts.  Read on to learn more.


The first chart below is the 240 minute ES chart.  It highlights three key support levels.  The Broken Support level is the most recent support level that was acting as a floor for price – until today.  Minor support exists just below that level between $3370~$3400.  Below that, we find Major support near $3325~$3355.

Our research team believes the current price breakdown, or repricing of risk, is an impulse price trend that will end fairly quickly.  Of course, we could find other support levels below these current levels, but we believe the current downside price trend is simply an impulse price trend related to the three components listed above.  We believe the Major support level will act as a strong price floor over the next 5+ days and potentially set up a substantial price bottom/base near the election day.


This Daily ES chart shows similar support levels, yet the Major Support level adjusted a bit lower – targeting levels near $3200~$3270.  The Minor support level on this Daily chart is aligned with the Minor support level on the 240 minute chart – which suggests this Minor support level may provide a reasonable price floor in the immediate future.  Otherwise, the deeper Major support level is likely to prompt a price bottom/base.

We believe traders and investors have already priced into the markets suitable expectations related to information available to them before these new COVID and other data points became available.  Now, as there is an immediacy related to adjusting positions and allocation level because of these new concerns, traders are “repricing” perceived risks and that results in what we call an “impulse price move”.  Structurally, not much has changed from the past few weeks in terms of economic data/expectations.  Traders are simply pulling risk away from the markets in an attempt to prepare for unknowns ahead of the November elections.

This means that capital will be primed and ready to redeploy into the markets once the dust settles.  As far as we are concerned, it means more opportunities for great trends and triggers will setup shortly.  We expect traders and investors to deploy their capital into suitable sectors/trends as soon as they are capable of discharging the risk concerns that are perceived right now.  That could come as early as November 5th or so if the election results are known by then.

I have been through a few bull/bear market cycles in stocks and commodities. I have a good pulse on the market and timing key turning points for investing and short-term swing traders.  If you want to learn how to become a better trader and investor, visit to learn how we can help you make money with our research and trading signals. Don’t miss all the incredible trends and trade setups coming up!

Chris Vermeulen

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in