The S&P 500 draught order us indices to open decisively higher this Tuesday as investors pin their hopes on the passage of a post-election to Raphael stimulus package. Both candidates for the US elections have emphasized getting the American economy working again in a safe environment. However, Democratic candidate Joe Biden has made this more of his campaign slogan in the last few days than the incumbent president. The stimulus package will be needed to get a lot of things done, and the markets are betting that whoever will become president is likely to deliver on an immediate stimulus to help the economy recover.
As the market awaits the results which will start to come in after the closing bell, the S&P 500 Index is up by 2.28% on the day. All 11 major S&P 500 indices in the green, but the Financials Index is dominating with a 2% gain at the moment.
The consensus is that the S&P 500 and other US stock markets may react positively to continuity, which is what they will get with a Trump victory. On the other hand, a Biden victory may only energize markets if he talks up stimulus after today. Otherwise, the markets may remain cautious over his calls to end fracking and to implement higher corporate taxes.
Technical Outlook for S&P 500
Today’s upside move comes off the potential neckline of the double top that failed to complete. The upside move negates the double top, and if price pushes to the upside target of 3528.9 before retreating, this could convert the pattern to a triple top. Today’s upside move appears to have found resistance at the 3393.5 price level. If bulls can push prices above this resistance, then 3481.6 becomes the next logical target to the north. 3528.9 lies ahead as an additional target to the north.
On the other hand, a rejection at the 3393.5 resistance opens the door for a downward push by sellers towards 3335.5, with 3282.2 and 3228.4 continuing to serve as initial downside targets. 3137.0 and 3070.8 could come into the picture if sellers can breach the neckline at 3335.5.
S&P 500 Daily Chart