News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am ET on DailyFX! https://t.co/lxd5fZnn4H
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/ZJOEtpGUIq https://t.co/tJWOXZCoBw
  • The US Dollar may seesaw as investors navigate what could be a volatile week packed with US GDP data, rising Covid-19 cases, Q3 corporate earnings and more. Get your #currencies update from @ZabelinDimitri here: https://t.co/UNRcd3c9uA https://t.co/BiUiOV4cXC
  • USD/MXN pushes lower towards a critical support level in the midst of continued political uncertainty. Get your #currencies update from @HathornSabin here: https://t.co/HEAzgJJJjg https://t.co/NU9wYbIuni
  • Gold Forecast - via @DailyFX “Gold price outlook still hinges on stimulus deal expectations and corresponding swings in real yields.” What will I have my eyes on in the week ahead? Link to Analysis: https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2020/10/23/gold-forecast-xau-usd-at-the-mercy-of-a-fiscal-stimulus-deal.html $GC_F $XAUUSD $GLD https://t.co/GWEI4d4mMu
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/rxswe1gVL0
  • Talks between the EU and UK restarted today and will continue over the weekend as negotiators from both sides battle against the clock. Get your #currencies update from @nickcawley1 here: https://t.co/ER8IT1yxYO https://t.co/Jeeu2P9mwB
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/W9awqb818J
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/lucvsACxu5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/yywnE39MLU
S&P 500 Bolstered by VIX Compression as Election Fear Fades

S&P 500 Bolstered by VIX Compression as Election Fear Fades

2020-10-15 20:00:00
Rich Dvorak, Analyst
Share:

S&P 500 PRICE OUTLOOK: STOCKS SEARCH FOR SUPPORT AMID LESS EXPECTED ELECTION VOLATILITY, FISCAL STIMULUS ‘CAN-KICKING’

  • S&P 500 dropped for the third-straight session owing to less fiscal stimulus optimism
  • Major stock indices have faced selling pressure as investor sentiment softens broadly
  • VIX Index compression could support stocks in light of reduced US election uncertainty
Advertisement

The S&P 500 Index declined by 0.15% on Thursday as stocks extend lower for the third session in a row. S&P 500 price action fell by more than 1% following the New York opening bell, but equities clawed back downside as trading progressed. Stocks have recently faced selling pressure amid US fiscal stimulus whiplash and mounting coronavirus cases globally. Despite these headwinds still threatening to steer the S&P 500 even lower, VIX Index term structure compression highlights one reason to stay optimistic on stocks.

US 500 MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% 2% 2%
Weekly 7% -1% 2%
What does it mean for price action?
Get My Guide

VIX INDEX PRICE CHART: FUTURES CURVE TERM STRUCTURE (02 OCT TO 15 OCT 2020)

VIX Index Price Chart Futures Curve Term Structure November Election Risk

The widening Biden-Trump presidential election spread, coupled with increased odds of a democratic sweep judging by recent polling data, seems to have eased investor concerns over a potential contested election this November. This is conveyed by a flattening of VIX Index futures curve over the last two weeks, which shows reduced hedging costs against potential downside risk around the election. In fact, the November VIX Futures contract closed at the 33.18-level on 02 October, but it now trades nearly 5-points lower at the 28.47-mark.

S&P 500 PRICE CHART: DAILY TIME FRAME (23 APR TO 15 OCT 2020)

S&P 500 price chart stock market forecast

Chart by @RichDvorakFX created using TradingView

Correspondingly, the S&P 500 might rebound back higher with future stock market volatility expectations drifting lower. Angst stemming from fiscal stimulus uncertainty could weigh negatively on stocks in the short-term, but with the prospect of a democratic sweep and even larger stimulus package early next year, the S&P 500 could stay broadly afloat.

Equities Forecast
Equities Forecast
Recommended by Rich Dvorak
Get Your Free Equities Forecast
Get My Guide

The 3,400-price level on the S&P 500 stands out as a potential zone of technical support. This level of confluence is also noted by its 50-day simple moving average. Breaching this level could open up the door to a re-test of September lows before the 200-DMA comes into focus. That said, Thursday’s bullish hammer candlestick points to potential for a reversal higher following the recent slide in stocks, which brings another look at month-to-date highs into play.

Keep Reading - USD Price Outlook: US Dollar Fueled by Stimulus Deal Volatility

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES