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S&P 500 Near Key Inflection Point With Election One Week Away

S&P 500 Near Key Inflection Point With Election One Week Away

Dimitri Zabelin, Analyst

2020 Election, S&P 500 Analysis, 2020 Polls, Biden-Trump Spread - Talking Points

  • US presidential election one week away – Biden continues to lead
  • Rising Covid-19 cases sparking risk aversion and a flight to havens
  • S&P 500 may challenge near-term support as selling pressure swells
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7 DAYS UNTIL THE US PRESIDENTIAL ELECTION

It is officially one week out until the US presidential election as voters mail in their ballots amid a resurgence of Covid-19 cases and concerns of public safety. Early indicators have shown that record-breaking number of Americans – 22 million – have already sent in their votes. The surge appears to be a function both of the circumstances relating to the coronavirus and growing Democratic zeal to vote out President Donald Trump.

2020 US Election Polls

2020 Polling Data

Source: RealClearPolitics

Joe Biden continues to lead in the polls ahead of the incumbent with a 7-point average that he’s held for a few weeks. The margins did narrow today but by a meager 0.5 points. Looking ahead, the Republican vote may surge on the election day itself if Republican-inclined voters opt to cast their ballot in person. This sudden spike may create some volatility and punish equity indices and push the haven-linked USD higher.

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S&P 500 Analysis

The S&P 500 may retest a key inflection point at 3361.0 if accentuated selling pressure from swelling risk aversion amid the spike in Covid-19 cases drags the index lower. Breaking that floor could open the door to challenging frequently-tested support/resistance – depending on the month – at 3282.3. Encountering that zone could itself signal the start of a deeper pullback.

S&P 500 - Daily Chart

Chart showing S&P 500

S&P 500 chart created using TradingView

Having said that, the fluidity and uncertainty of the situation as it pertains to the 2020 US presidential election and coronavirus makes the S&P 500 vulnerable to bouts of volatility.

--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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