Have markets factored in a Trump win?
Four years after Donald Trump’s surprise presidential victory roiled markets, investors are prepared for short-term trading turmoil and major long-term policy shifts, on the eve of Tuesday’s U.S. election.
Investors could confront dramatically different paths for the country on taxes, government spending, trade and regulation depending on who wins the White House, the Republican Trump or Democratic former Vice President Joe Biden.
Biden is ahead in national opinion polls, but races are tight in battleground states that could tip the election to Trump. And perhaps the outcome most likely to shake markets – at least in the near term – is no immediate outcome at all.
The biggest fear for markets is for Wednesday to arrive with the election still in doubt and the vote too close or contested.
Lacking a clear result, investors would likely flock to safe-haven assets, such as gold and U.S. Treasuries as well as perhaps the Japanese yen and U.S. dollar, Invesco’s Hooper said.
An unclear result – or indeed a result with split party control, for example Biden winning and the Senate staying Republican – would also throw more doubt on prospects for a fiscal relief package.
A Democratic sweep is seen as the surest path to massive stimulus to help revive an economy decimated by the pandemic that has killed nearly 230,000 Americans. A stimulus deal could lift shares, fuel a long-awaited rotation to economically sensitive value stocks and accentuate trends of a weaker dollar and steeper yield curve.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 23.68.
The projected upper bound is: 25.91.
The projected lower bound is: 22.07.
The projected closing price is: 23.99.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.8219. This is not an overbought or oversold reading. The last signal was a sell 15 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 47.09. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 28 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -24. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.002 at 24.040. Volume was 8,900% above average (trending) and Bollinger Bands were 58% narrower than normal.
Open High Low Close Volume 24.060 24.180 23.930 24.040 7,550
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 24.17 25.18 19.97 Volatility: 36 49 57 Volume: 755 151 38
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 20.4% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future.
Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 7 periods.