The overall market as measured by the Dow Jones Industrial Average gained 946.06 on the week to finish last Friday at 9,325.01. This amounted to a gain of approximately 11.2% on the week; a rather impressive move. However I would not take the market's strength last week as a sign of the start of a new upward trend in the market. My thoughts are that the election is going to have a major impact on the direction of the market, and what we are seeing is some repositioning ahead of Tuesday's election. While the Dow Jones Industrial Average is no longer in a condition of being dramatically oversold on a technical basis, it is still facing significant downward pressure. There are a pair of downward trendlines that form a downward trading band that the Dow Jones Industrial Average has broken significantly below. The Dow Jones Industrial Average still has a significant way to go before it reaches the lower of the two downward trendlines, and unfortunately the lower downward trendline is now a form of upside resistance instead of the downside support it previous provided. And, if the Dow could break above the lower of the two trendlines, it would still see significant downward pressure from the upper trendline. Regardless of who wins the Presidential election on Tuesday I would not look for the Dow Jones Industrial Average returning to its previous highs anytime soon.

I've been looking at several long term charts of the Dow Jones Industrial Average and my thoughts are that when the Dow does finally rally it will most likely consolidate in the 10,300 range. Where it goes from there is really the big question. If business conditions are favorable, then I would see the Dow Jones ultimately moving towards the 20,000 level. If business conditions are unfavorable I see the Dow Jones dropping down to the 5,700 level. We will have a good idea on Wednesday morning how the business climate is going to shape up.

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Dow Jones Industrial Average (INDU)

Current Opinion: Closed @ 9,325.01 Last Signal: Called Lower (again) with the close of 8,378.95 on October 24th. Current Expectations: Ask me after the election

The S&P 500

Current Opinion: Closed @ 968.75 Last Signal: Called Lower (again) with the close of 876.77 on October 24th. Current Expectations: Ask me after the election.

The NASDAQ 100 (NDX)

Current Opinion: Closed @ 1,334.78 Last Signal: Called Lower (again) with the close of 1,202.27 on October 22nd. Current Expectations: Ask me after the election.

CBOE Ten Year Treasury Index (TNX)

Current Opinion: Closed @ 3.970% Current Expectations: With the current market turmoil it is anyone's guess where interest rates are going. However, my guess is that short term debt instruments will be more sought after than longer term ones.