S&P500 anticipates correction, Trump sweeps 1stDebate
US futures yesterday closed higher having a positive start to the session as PCE inflation data which ended in positive despite other economic data not having been as good as expected. The unemployment data has been better than expected and the economic growth data has been as expected. Overall, there is a general sense of economic slowdown. Today's PCE price index release is due this afternoon to see how the Fed will react to interest rates. Expectations of cooling in May but above the 2% target are on the table, and as we say in an environment of economic cooling. Which shows us very weak growth in the first period of the year reading the GDP data. Wall Street represented this data to the upside in a day that was very volatile. This positive sentiment was driven by microchip makers such as Micron Technology Inc that forecast somewhat lackluster earnings, but was interpreted positively.
On the other hand, the debate for the presidency between Joe Biden and Donald Trump was full of disrespect on both sides, but in which Trump left a current president who was hesitant, stammering, with a strained voice and who even suffered lapses and went blank. Trump tried to show that Biden was senile and would not be able to face another presidential term. Biden was not able to spin his strong points and conclude them as can be: the defense of abortion, improving access to healthcare, and many unconnected ideas on how to improve border protection. Trump also insisted on questioning the legitimacy of the 2020 election that he lost. Trump focused his dialectic on simple, direct and well-formed sentences seeking to avoid challenging his exaggerations or inaccuracies, which was also not done with Biden despite his constant misplaced notions. Interesting to see that Trump also did not put too much impetus in presenting his program but tried to wash his face with the issue of the porn star claiming not to have sex, while Biden labeled him a "convicted felon".
But the earthquake involving his family and the Democratic circle created in Ukraine and the issue of minors and illegal gun possession involving his son was omitted. In short, the whole resulting debate has shown that Biden is at a disadvantage against Trump in what consultant and pollster Frank Luntz called "a political earthquake". The New York Times published comments from the Obama campaign strategist saying, "Joe had a deep well of affection among Democrats and it has run dry," adding, "Parties exist to win. The man on stage with Trump can't win. Fear of Trump suppressed criticism of Biden. Now this same fear is going to fuel calls for him to step down." What is clear is that Trump has come out stronger in what was supposed to be an early event to improve Biden's image. The next debate will be on September 10 following the formalization of the conventions of both parties resulting in the formalization of the candidates. Biden convinced in Atlanta has communicated: "see you at the next one".
Looking at the S&P500 chart (Ticker AT: USA500), we can see that on June 20th the bullish breakout started on June 5th was halted. Yesterday we could see that the markets interpreted the above mentioned economic data in a positive way in a move initiated since the indecision of the 26th. Today, possibly after the political debate and an expectation of a return to a Republican government, it is possible that the market will be driven higher. What is foreseeable is a turn to the mean sometime next week. Because right now the indicated RSI is at the oversold limit at 71.26% and the bell shape has very pronounced price zones at the highs, at the area of the previous high and at lower 5,233 where the checkpoint (POC) is located. If the market interprets the return of Trump as something positive it is possible that the market will not decline, what is clear is that it is not good that Biden has shown so much senility and that can correct the value of the U.S. market for his inability to manage the country. The next market target before the next presidential debate should be the 5,700 points zone if it does not face a strong correction towards 4,930 which is the current support zone.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
On the other hand, the debate for the presidency between Joe Biden and Donald Trump was full of disrespect on both sides, but in which Trump left a current president who was hesitant, stammering, with a strained voice and who even suffered lapses and went blank. Trump tried to show that Biden was senile and would not be able to face another presidential term. Biden was not able to spin his strong points and conclude them as can be: the defense of abortion, improving access to healthcare, and many unconnected ideas on how to improve border protection. Trump also insisted on questioning the legitimacy of the 2020 election that he lost. Trump focused his dialectic on simple, direct and well-formed sentences seeking to avoid challenging his exaggerations or inaccuracies, which was also not done with Biden despite his constant misplaced notions. Interesting to see that Trump also did not put too much impetus in presenting his program but tried to wash his face with the issue of the porn star claiming not to have sex, while Biden labeled him a "convicted felon".
But the earthquake involving his family and the Democratic circle created in Ukraine and the issue of minors and illegal gun possession involving his son was omitted. In short, the whole resulting debate has shown that Biden is at a disadvantage against Trump in what consultant and pollster Frank Luntz called "a political earthquake". The New York Times published comments from the Obama campaign strategist saying, "Joe had a deep well of affection among Democrats and it has run dry," adding, "Parties exist to win. The man on stage with Trump can't win. Fear of Trump suppressed criticism of Biden. Now this same fear is going to fuel calls for him to step down." What is clear is that Trump has come out stronger in what was supposed to be an early event to improve Biden's image. The next debate will be on September 10 following the formalization of the conventions of both parties resulting in the formalization of the candidates. Biden convinced in Atlanta has communicated: "see you at the next one".
Looking at the S&P500 chart (Ticker AT: USA500), we can see that on June 20th the bullish breakout started on June 5th was halted. Yesterday we could see that the markets interpreted the above mentioned economic data in a positive way in a move initiated since the indecision of the 26th. Today, possibly after the political debate and an expectation of a return to a Republican government, it is possible that the market will be driven higher. What is foreseeable is a turn to the mean sometime next week. Because right now the indicated RSI is at the oversold limit at 71.26% and the bell shape has very pronounced price zones at the highs, at the area of the previous high and at lower 5,233 where the checkpoint (POC) is located. If the market interprets the return of Trump as something positive it is possible that the market will not decline, what is clear is that it is not good that Biden has shown so much senility and that can correct the value of the U.S. market for his inability to manage the country. The next market target before the next presidential debate should be the 5,700 points zone if it does not face a strong correction towards 4,930 which is the current support zone.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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