S&P AND TRUMP: any last words?
How do you feel about dinosaurs going extinct? Probably, nothing. They just “had” to go. How do you feel about Donald Trump’s defeat? Should be the same logic: he just has to go. But he is not a dinosaur so he will not just go away like this. He still has a couple of months in the White House, and it looks like he will make some noise before he leaves. “Why such a condescending manner?” – because one needs to recognize and accept when it’s over. Donald Trump does have charisma – no one can take that away from him. Donald Trump does have a vision of how things ought to be done in the US and in the world – and maybe, this vision is the best for the US. But the American people don’t want it anymore. Fraud or not, it doesn’t matter – there are enough people out there to support the alternative direction offered by Joe Biden. “Make America great again” doesn’t have the momentum it used to have a couple of years ago. No one knows what Joe Biden will do to America, but what Donald Trump could have done – most people are no longer interested to know. That’s the end of political life. And Donald Trump refuses to face it. But that’s fine – we all choose where to look and what to listen to. But most of us have no influence on the world economy with our choice – Donald Trump has. And what is it now? It is a destabilization risk coming from the contested election – the market’s biggest fear since recently.
In numbers, that’s a downside potential for the S&P to drop to 3 200. In fact, that would be that 1o% bearish threat that observers have been discussing before the US Election results. Is there a probability of a stronger bearish incursion? Quite unlikely. In fact, the probability of a drop to 3 200 is pretty thin as well. Why? Because as of now, there is no solid proof of a large-scale fraud anywhere in the US. Of course, Donald Trump says it is all a fraud but for that, there is the entire and worldwide-envied American judicial system with all its fact-checks and procedures to satisfy both the plaintiff and the defendant and find the truth based on evidence. And until now, no evidence for a fraud has been found so far. For this reason, it would be fair to say that the real threat for the S&P is to get down to the middle of the channel – somewhere at 3 400 – in case Donald Trump goes all-in to question the results of the election but it should not take more than that. So stay calm and keep trading.
