Date: November 3, 2026

Time: 7:02 AM EST

Election Day Market Brief: Nasdaq at a Critical Inflection Point

November 3, 2026 | Pivotal Point Research

The market enters Election Day in a fragile position. After Monday's sharp reversal, the Nasdaq is approaching an important support area, while several other asset classes are showing unusual behavior.

The central question is whether the recent weakness represents a broader deterioration in the market or simply another phase of inventory correction within a six-month consolidation.

We do not have a definitive answer yet. But there are several important levels that will help determine the next move.

The Big Picture: Election Day and Market Positioning

Today is Election Day in the United States, with control of both chambers of Congress at stake. Current polling and prediction-market expectations point toward a potential Democratic victory in both the House and Senate.

The market's reaction, however, is what matters. We should not assume that a particular election outcome automatically produces a bullish or bearish response. The collective reaction of market participants will tell us more than the political headlines themselves.

Yesterday's session was particularly revealing. The Nasdaq initially rallied more than 1%, bouncing approximately 2% from its 200-day exponential moving average. But that strength did not last.

After testing above the $698 area, the index reversed sharply and ultimately declined approximately 2.67%.

This was another example of a failed upside attempt. The market attracted buyers, tested important resistance, and then reversed as sellers regained control.

Our interpretation is that short-term positioning continues to dominate. The market has experienced substantial short covering and inventory adjustments, but larger participants have not yet established a decisive move out of the prevailing range.

That could change after the election.

1. Nasdaq 100 (QQQ): The Most Important Market to Watch

The Nasdaq remains our primary focus.

Since the June 2 high, QQQ has spent approximately six months consolidating. The earlier breakout attempt failed in October, and we became more cautious at that point. On October 13, we discussed the importance of hedging as the failed breakout increased the risk of a rotation toward the opposite end of the range.

Since then, the index has corrected approximately 8.3%.

Yesterday's decline brings us back to an important decision point.

The levels that matter

The immediate overnight balance area is approximately:

• $684: Lower boundary of the recent overnight range.
• $685: Upper boundary and the level we want to see buyers reclaim.
• $680: Important downside reference if selling accelerates.
• $661: The larger pivotal low from the previous liquidation episode.

The distinction between these levels is important. We are not simply looking for a bounce. We want to see whether buyers can establish control above the overnight balance.

Bullish scenario: A short-covering rally

If QQQ convincingly breaks above $685, the probability of a short-covering rally increases.

Traders who established short positions during the recent decline may begin covering. That could produce a rapid move of approximately 1.5%–2%, potentially bringing the index back toward Monday's highs.

A more favorable interpretation of the election results could provide an additional catalyst, although we will wait for the market to confirm that reaction.

Bearish scenario: A breakdown in support

If QQQ loses approximately $679–$680, the downside risk increases.

The next important reference is the previous liquidation low near $661. A move toward that area would represent another meaningful decline from current levels.

However, we are not declaring the end of the broader bull market.

As long as QQQ holds above approximately $660–$661, the longer-term uptrend remains intact within our framework. The six-month consolidation may be a correction in market inventory rather than a confirmed reversal of the larger trend.

That distinction matters. Corrections do not always require a market crash. Sometimes they occur through prolonged sideways trading, volatility, and the gradual transfer of positions from one group of market participants to another.

Our focus today: Watch $685 for a potential upside resolution and $679–$680 for evidence of further downside pressure.

2. S&P 500 (SPY): A Secondary Focus

The S&P 500 remains important, but it currently offers a less compelling short-term opportunity than the Nasdaq.

The critical pivotal level remains $750.

If SPY breaks below $750, the next important reference is around $731. That suggests a relatively defined downside area of approximately 3% before we reassess the market's response.

The Nasdaq, by comparison, has a more pronounced short-term opportunity because of the potential for a sharp short-covering move if resistance is reclaimed.

For now, we will continue to monitor the S&P 500, but our attention remains on QQQ.

3. Gold: Consolidation After a Significant Correction

Gold has corrected approximately 28% from its recent high and remains below the important $3,977 pivotal level.

Yesterday, the market retested that level and was rejected.

As discussed in our previous commentary, once the $3,977 level was lost, we expected the possibility of a period of consolidation rather than an immediate directional move.

That is what we are seeing.

The current working range is:

• $3,879: Important support.
• $3,977: Important resistance.

A recovery above $3,900 and then $4,000 could create the conditions for a short-covering rally.

On the other hand, a decisive break below $3,879 would increase the probability of a move toward the $3,500–$3,300 area.

We will let the market resolve this range before drawing a stronger conclusion.

4. Silver: Waiting for the Next Pivotal Level

Silver remains structurally weaker than gold.

The break below the $62–$66 area confirmed that the previous attempt to change the trend had failed. Since then, the market has continued to move lower.

Our next area of interest is approximately $45–$47.

We are not looking to anticipate a reversal before the market reaches that zone. For now, the appropriate approach is to remain patient and observe how buyers respond when price approaches that area.

5. U.S. Treasuries: The Traditional Safe Haven Is Not Responding

One of the more interesting developments in the current market is the behavior of long-duration Treasury bonds.

Historically, a significant equity sell-off would often be accompanied by buying in government bonds as investors seek safety.

That relationship is not particularly evident right now.

Despite the weakness in technology stocks and the broader market uncertainty, long-duration Treasuries have not attracted the kind of sustained buying one might traditionally expect. The bond market was down approximately 0.5% in the latest session.

Why is this important?

It suggests that investors may be interpreting the current equity weakness as a correction concentrated in speculative technology and AI-related positions, rather than as evidence of a broad economic slowdown.

There is another important piece of evidence: sector rotation.

While technology stocks have struggled, several other areas of the market have performed well:

• Quantitative Value ETF: Up approximately 11% since October.
• Consumer Staples (XLP): Up approximately 13%.
• Healthcare: Up approximately 12%.
• Energy: Also showing relative strength.

Rather than moving aggressively into long-duration bonds or gold, investors appear to be reallocating capital into other equity sectors.

This does not mean bonds cannot rally or that the current interpretation will remain correct. It simply tells us that the traditional safe-haven response is not currently dominating market behavior.

We will continue to watch how Treasuries respond as the equity correction develops.

6. Bitcoin: $75,000 Remains the Line in the Sand

Bitcoin remains within an important consolidation area.

The key reference is $75,000.

As long as Bitcoin holds above this level, the current structure remains intact. A sustained break below $75,000 could trigger additional selling as protective stops are activated, potentially exposing the $66,000 area.

For now, we are watching the $75,000 level rather than trying to anticipate the next move.

7. Semiconductors (SMH): A Critical Test at $500

The semiconductor ETF remains one of the most important bellwethers for the broader technology market.

The pivotal level is $500.

Interestingly, SMH is showing relative strength today, rising approximately 2% in the latest session despite the weakness in other parts of the technology complex.

This divergence is worth monitoring.

It may indicate that some of the selling pressure is being absorbed, although a single session does not establish a reversal.

Our framework remains straightforward:

• Above $500: The broader consolidation and bullish structure remain intact.
• Below $500: The risk of a more significant trend reversal increases.

A decisive break below this level could produce a violent move lower. Conversely, if the market tests below $500 and quickly reclaims it, that rejection could become an important signal.

We are not making a directional call yet. We are watching the pivotal level.

Our Outlook: Let the Market Decide

The market is approaching an important event, and volatility is likely to remain elevated.

The Nasdaq is at a critical inflection point. A sustained move above $685 could trigger a short-covering rally, while a breakdown below $679–$680 would increase the probability of another move toward the previous lows.

The S&P 500 remains focused on $750. Gold is consolidating beneath broken resistance, silver remains weak, Bitcoin is holding its $75,000 reference, and semiconductors are testing the important $500 level.

Perhaps the most interesting development is that capital is rotating into value, consumer staples, healthcare, and other sectors rather than moving decisively into traditional safe havens.

We are not approaching the market with a fixed bullish or bearish bias.

Our process is to identify pivotal points, observe acceptance or rejection, and update our assessment as new information becomes available.

The market will tell us what it wants to do. Our job is to listen.

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