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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • The Sterling extends its recent rally with spot $GBPUSD briefly topping the 1.3000 handle. Get your market update from @RichDvorakFX here: https://t.co/npXT9wfyk4 https://t.co/TRYp5RHWVw
  • British MPs to vote on PM Boris Johnson's #Brexit bill Tuesday 7PM local UK time $GBP #MeaningfulVote
  • The Government has published the EU Withdrawal Agreement Bill which will be debated by members of parliament tomorrow according to Sky $GBPUSD
  • Canadian Dollar Price Outlook: USD/CAD Nearing Confluent Support Zone https://www.dailyfx.com/forex/fundamental/article/drivers_of_price_action/2019/10/21/canadian-dollar-price-outlook-usd-cad-nearing-confluent-support-zone-js53-cad-chart.html https://t.co/2V03DZZeVE
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 0.03% Oil - US Crude: 0.00% Gold: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/HZO5HK4CR4
  • $CAD notably firmer on election day with USD/CAD briefly dipping below the July 31st low (1.3105). Get your market update from @JMcQueenFX here: https://t.co/gXSBZURclY https://t.co/UBbam5SlMj
  • "Japanification is the logical consequence of the wrong application of mainstream macroeconomics." "What is worse is that prolonged monetary easing tends to lower productivity growth by keeping inefficient businesses alive" $JPY $USD $EUR $AUD
  • Central banks adopting wrong lessons from 'Japanification' - former BoJ Governor Shirakawa "I am puzzled by the spread of this Japanification. Have Western economists and policymakers not learned the lessons for avoiding it from Japan's own experience?" https://t.co/ozCG12Lyjp
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.98%, while traders in Germany 30 are at opposite extremes with 76.63%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/gPJhm7FUS6
  • Trading #gold is much like trading #forex if you use a spread-betting platform. Get your gold trading tips and strategies from @MartinSEssex here: https://t.co/giIfn02RQC https://t.co/MsNMzcCOrQ
The S&P 500 Comes Full Circle Ahead of Presidential Election

The S&P 500 Comes Full Circle Ahead of Presidential Election

2016-11-08 11:11:00
Paul Robinson, Currency Strategist
Share:

What’s inside:

  • The S&P 500 bounces from confluence of support, oversold conditions on FBI clearing Clinton (again)
  • We’ve come full circle ahead of the election since the new probe began/ended
  • Waiting on the outcome to decide what is what, no sense in taking risk ahead of it (levels noted)

In the last post, we were noting several lines of influence intersecting in the 2094/85 region along with the 200-day MA rising up from just a few short handles below. From Thursday’s piece,“even though consecutive down days, in and of itself, doesn't qualify as an oversold indicator, when we have a confluence of technical events close at hand it increases the odds we will see support act as a springboard.” After nine straight days of losses by the S&P 500, the longest streak since 1980, the combination of oversold conditions, significant support, and a bullish catalyst (FBI clearing Clinton) led to the 2%+ surge to start the week.

We’ve come full circle: The bulk of the recent decline starting late last month began on Friday, October 28 when the FBI said it was reinvestigating Clinton’s handling (or mishandling) of emails in light of new evidence. This sent the market reeling from about 2140 in the S&P, with it having already effectively priced in a Clinton victory given poll margins. Yesterday’s rally from Friday’s close at 2085 came after the FBI said on Sunday they found no reason to move forward with criminal charges against Clinton, sending the markets up big. The S&P 500 closed over 2131. Pretty much back to where we started.

Today is the election, and a lost trading day. It won’t be until early tomorrow morning GMT time we find out who the winner is, Clinton or Trump. It’s in Wednesday’s session we will see how the market feels about the outcome. (Join me tomorrow at 9 GMT for a look at price action following the results.) It looks as though a Clinton victory will be a positive, at least initially, whereas a Trump victory will likely lead to a sell-off, even if only short-lived. It also depends on how clear the results are; if they are extremely close, it won’t be surprising to see the results contested, especially if Clinton wins. If that is the case, it could be weeks before the winner is decided – a scenario which will keep the market on edge until we have a resolution.

In ‘wait-and-see’ mode. We see no point in placing any wagers at this juncture. This time, too, shall pass and we will move on to a more ‘normal’ trading environment where risk/reward will be more favorable.

Levels & lines to watch in the days ahead: Resistance lies not far ahead at the 10/10 upper parallel (~2137), the important 8/23 trend-line (~2152) which roughly coincides with the 10/24 high at 2155. An aggressive move above trend-line resistance will find the 9/22 to 10/10 period (~2170/2180). The first area of interest on the downside is in the 2115/20 vicinity, a zone which acted as solid support since September but presented little resistance yesterday. Below there, nothing substantial until the April lower parallel, lower parallel to the 8/23 trend-line, and the 200-day moving average. This cluster of support lies at ~2090 down to 2084.

S&P 500: Daily

The S&P 500 Comes Full Circle Ahead of Presidential Election

Created with Tradingview

Forecasts and Trading Guides

---Written by Paul Robinson, Market Analyst

To receive Paul’s analysis directly via email, please sign up here.

You can follow Paul on Twitter at @PaulRobinonFX.

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

DISCLOSURES

News & Analysis at your fingertips.