Yes, today we are having the election of the president in the United States of America! Whoever wins, the stock market is playing its own game anyway. Therefore, let’s have a look at current setup and then see how it revolves.
When looking at a daily chart of S&P500, the price is trying to claim back its 100 SMA. If the recent pullback is an end of current decline, the higher low would enable the price to move within consolidation pattern – Symmetrical Triangle. At least the Slow Stochastic is supporting the oversold condition.
Of course, if the price drops below orange line and September low, the next support would be 200 SMA.
How to follow a trend in current price swings?
I have broken down a timeline of recent months, in particular the correction we are experiencing. To read about the model in detail, see a dedicated article here. For now, we can see on below hourly chart also S&P500 with technical indicators represented by arrows as certain events.
Last week the price experienced a Dark Red Arrow event, which suggests a possible trend change – in other words: price reversal! Whether the upward trend is going to happen, we shall observe a Light Green Arrow in upcoming days.
Furthermore, we are also seeing bullish divergence – see the purple lines – same situation happened last time late September when the S&P500 index changed direction.
There are tons of articles saying what’s gonna happen if Trump wins and what’s gonna happen if Biden wins. Nothing’s gonna happen, investors currently care about printing money and that’s gonna happen one way or another because this is how current economy is designed. Question is only when is this going to happen! And until then the market will consolidate. You as a smart trader can take appropriate decision to make profit.