U.S. markets opened mixed while spending the majority of the session trading in positive territory afterwards.

There was some late day weakness before a strong rally to session highs into the close and ahead of the midterms elections.

The outcome should help ease the near-term uncertainty of how Congress is controlled but other headwinds remains.

Volatility is still giving a neutral reading although the bears have been in control since early October.

The Dow was up 0.7% after trading to an intraday peak of 25,651. Lower resistance at 25,600-25,800 was cleared and held with a move above the latter and the 50-day moving average signaling additional strength.

The S&P 500 soared 0.6% following the run to 2,756.

Upper resistance at 2,740-2,750 was cleared with continued closes above 2,765-2,775 and the 200-day moving average being a more bullish development.

The Nasdaq snapped a 2-session losing streak after rising 0.6% while trading to a high of 7,400.

Lower resistance at 7,400-7,450 failed to hold with more important hurdles at 7,500-7,525 and the 200-day moving average.

The Russell 2000 also climbed 0.6% after testing an intraday high of 1,557.

Near-term resistance at 1,560 held for a 3rd-straight session with a close above this level getting 1,675-1,680 in play.

Materials and Industrials were the strongest sectors after rallying 1.6% and 1.1%, respectively. and 1.4%.

Utilities added 0.7% while Technology, Communication Services, Consumer Staples, and Real Estate were all higher by 0.6%.

There were no sector laggards.

Global Economy – European markets closed lower after the EU continued to put pressure on Italy to submit a new budget and end the current standoff over the country’s spending plans.

UK’s FTSE 100 gave back 0.9% and France’s CAC 40 was lower by 0.5%. The Belgium20 and the Stoxx 600 Europe declined 0.3% while Germany’s DAX 30 slipped 0.1%.

The Eurozone October Markit composite PMI was revised upward to 53.1 from the originally reported 52.7, but still represented the slowest pace of expansion in 2 years.

Eurozone September PPI was up 0.5% month-over-month and 4.5% year-over-year, stronger than expectations of 0.4% and 4.3%, respectively.

German September factory orders rose 0.3%, topping estimates for a drop of 0.5%.

Asian markets were mostly higher after Chinese Premier Li Keqiang said China will open up its financial industry as early as possible.

Japan’s Nikkei jumped 1.1% and Australia’s S&P/ASX 200 soared 1%.

Hong Kong’s Hang Seng gained 0.7% and South Korea’s Kospi added 0.6%. China’s Shanghai was lower by 0.2%.

Japan September household spending fell 1.6% year-over-year, weaker than expectations for a rise of 1.5%.

Redbook Store Sales were up 6.1% for the year in the week ending November 3rd.

The September JOLTS report showed job openings fell 284,000 to 7,009,000 following the 216,000 August surge to 7,293,000. Expectations were for a print of 7,110,000.

Despite the pullback from their record peak, job openings remained over 7 million for a third straight month. The job openings rate slid to 4.5% from 4.7%.

Hirings declined 162,000 to 5,744,000 after rising 193,000 to 5,906,000 previously.

The rate fell to 3.8% from 4%. Quitters declined 47,000 to 3,601,000 after rising 40,000 to 3,648,000.

The rate was steady at 2.4%.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) tested a high of $112.73 shortly after the open with lower resistance at $112.75-$113.25 holding for a 2nd-straight session.

A move above $113.50 would be a slightly bullish development for a possible push towards $115-$116 and a downtrending 50-day moving average.

Near-term support remains at $112 following the kate day fade to $112.33.

A close below this level will likely lead to a continued backtest towards $111.50-$110 and fresh 52-week lows.

Market Analysis – The Spider Small-Cap 600 ETF (SLY) was up for the 5th time in 6 session after trading to an intraday high of $69.89.

Lower resistance at $69.50-$70 was cleared and held with continued closes above $71 and the 200-day moving average being a more bullish signal.

Current support is at $69-$68.50. A close below $68 would likely signal another round of selling pressure.

RSI is approaching resistance at 50. A move above this level could lead to a run towards 55-60 and the September peak.

Support is at 45-40.

The Dow Jones Transportation Average ($TRAN) snapped a 2-session slide after peaking at 10,487.

Near-term resistance at 10,500 held with additional hurdles at 10,700-10,750 and the 200-day moving average.

Short-term and shaky support is at 10,400-10,350.

A move below the latter would be another bearish signal with risk to 10,200-10,000. The 50-day moving average remains in a nasty downtrend.

RSI is back in an uptrend with resistance at 50.

Continued closes above this level would signal additional momentum towards 55-60. Support is at 45-40.

Existing Position Update

Stocks appear to be headed higher – especially if GOP maintains control.

Expect SPY to cross 200 day line and funds to begin accumulating once again next few sessions.

I may take off QCOM before earnings tomorrow night temporarily.

Will update you tomorrow as usual.

Roger Scott