The S&P 500 Index And The US Elections | Theory, Comments & More

19 de set. de 2020

We are looking here again at the S&P 500 Index (SPX), let's mix the message we get from this chart in relation to the US Elections.

First, feel free to hit LIKE to get started...

Now, the chart technicals.

We have a bearish SPX chart with prices closing below EMA50 for the first time since May, we saw a fake breakdown of this level as prices quickly moved back up and resumed growing.

Now we have strong bearish volume coming in with indicators trending down/red/more bearishness...
But we've seen this pattern before.

Each time the SPX hits a new peak, prices drop to the 0.236 Fib. retracement support level.
As soon as this level is hit, the bullish action is resumed.

This same level is about to be hit next week... will the bullish action resume this time as well?

We are having bearish signals but is possible to see a reversal at this level...
Marked on the chart as "potential rebound support"... but why?


What about the US Elections?

Here is the scenario...

• A bullish SPX is good for the incumbent party, the sitting president, according to past history.
  
• A bearish SPX ("stock market") is bad for the sitting president.
  

If Donald Trump is to win, we are likely to see the SPX continue growing to see a real crash take place just right after the elections. (green)

But if Donald Trump is to lose, we should be seeing the SPX go straight red... (red)

Times are different though, things can always change.

As for the SPX chart by itself, we are looking at strong bearish signals developing... To me, it reads lower prices but signals are not all...

Conditions for change
Starting the week and moving back above EMA50 would signal that the green scenario is most likely...
But staying below this level can lead to even lower prices fast.

I think Trump will win...
If that's the case, then the SPX should go up but the signals here are telling me that this index is ready to drop.

Is Trump going to lose then?

Can we really predict the outcome of the SPX or the elections in such turbulent times?

What's your take?

Please share it with us in the comments section below.

Namaste.