US STOCKS: S&P(ESZ5) - Consolidates Above 6800, Real Gains Seen In Larger Market

• RES 3: 140.08 High Jun 13  
• RES 2: 139.05 High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 135.96 @ 16:10 GMT Nov 3
• SUP 1: 135.61 - Low Oct 08 
• SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
• SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)  

Prices started last week well, growing the gap with next support into the 135.61 Oct 08 low. Despite this stability, prices remain inside the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high. Further weakness would open 135.39 next, a Fibonacci projection. 

• RES 3: 140.08 High Jun 13  
• RES 2: 139.05 High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 135.96 @ 16:10 GMT Nov 3
• SUP 1: 135.61 - Low Oct 08 
• SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
• SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)  

Prices started last week well, growing the gap with next support into the 135.61 Oct 08 low. Despite this stability, prices remain inside the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high. Further weakness would open 135.39 next, a Fibonacci projection. 

The S&P(ESZ5) overnight range was 6849.50 - 6909.50, SPX closed +0.17%, Asia is currently trading around 6878.00. The E-Mini’s continue to chop around sideways and seem to bounce pretty hard off the 6850 area for the third session in a row. This morning has seen stocks open slightly lower, E-minis(S&P) -0.05%, NQZ5 -0.10%. The market is clearly in a powerful uptrend, though there are signs of some short-term exhaustion but as of yet no pullback. Lots of chatter about the Fed needing to expand its balance sheet into year-end which could potentially add to short-term liquidity and keep the stock market supported. h/t - @LynAldenContact, Nothing stops this train.

• Andreas Steno Larsen believes “we are on the precipice of a broad-based positive surprise in the economy still”, see graph below showing how easy financial conditions are.
• Joseph Wang points out on X that the “Fed will need to expand its balance sheet by several hundred billion a year, and may start in December to head off year-end funding pressures. A structurally rising TGA and insatiable demand for repo financing leave them little choice.” This could add to short-term liquidity and ease financial conditions even more.

Fig 1: ISM Comp Vs Financial Conditions

Source: MNI - Market News/Steno Research