S&P: breakthrough or bounce
While the US Presidential elections are nearing, and the public debate between Trump’s and Biden’s camps are carrying on, the S&P comes to test the September highs. What to do with that? Be careful.
Eventually, it will be a breakthrough: S&P will “have” to come back up to where it dropped from – to 3 580. But that is still pretty far away. So the question is whether this intermediary boundary range of 3 427 – 3 440 gets crossed in the nearest short term or later on. “Slightly later on” seems to be the right answer.
In this scenario, a slight bounce downwards to the area below 3 427 - somewhere at 3 400 – appears most probable. After that, a breakthrough upswing is likely to follow. So let’s test this hypothesis: watch the range of 3 427 – 3 440 for crossing. If it doesn’t happen until the weekend, it will mean that the downward bounce scenario is looming. If it does, it will mean that this hypothesis was wrong, and a straight breakthrough is coming – but make sure to verify it.
