Technically Speaking – October

November 4, 2026

Technically Speaking:

Long Term Resistance SP500:                  7,820

Long Term Support SP500:                         7,530 then 7,238

October was an interesting month. The DOW Jones increased 1.7%, small cap and mid cap indices both increased about 0.5%, the S&P 500 dropped 0.9%, and the tech heavy NASDAQ dropped 5.3%. These numbers show a clear rotation out of tech and into other sectors during October. Data center companies and other companies that are part of the data center ecosystem were at the center of the tech sell off during the month. Investors became cautious with the mid term elections approaching. The democrats ran on a platform to slow down the data center and AI build out, so if congress flipped blue that would not be good news for data centers and AI companies. The market was pricing in the odds of congress flipping to democratic majority. However, if history tells us anything, an October sell off is more of the norm and then we see a rally in November and December to close out the year.

The markets tend to do well after midterms. The S&P 500 has returned an average of 15% in the 12 months following a midterm election. On top of that, the President’s 3^rd year has historically been a strong year as well, with the S&P returning around 14%. Barring any black swan events, I believe the markets are setting up for a strong rally in the next 12 months. Even if congress flips to democratic power, President Trump still has veto power to bills, so we could see some gridlock over the next couple years. Gridlock would help with the continuation of the AI infrastructure build out, which in turn would be good for tech stocks.

Technically speaking, the S&P 500 has been in a channel since the beginning of September, ranging between 7,530 and 7,820. The S&P has tested the all-time high of 7,820 a couple times during this period but could not break through either time. It also hit its support of 7,530 twice and both times rebounded off the level. If the S&P falls through that support level of 7,530, then we could see the S&P fill a gap at 7,238. If the markets are able to break through the resistance level of 7,820, then we could see the S&P go test the 8,000 level.

The next couple of months will be very telling of where the AI infrastructure build out could go in the short term, but I am still bullish on the AI world long term. This technology is transforming all of our industries and how efficient companies can operate.