The article was written by me for FXStreet.
Mixed fundamentals resulted in flat trading last week. Coronavirus vaccines are coming. Moreover, there is a lot of rumors out of Washington that stimulus negotiations might be back on the table before 2021. What does it mean for the US stock market?
Pfizer-BioNTech is expected to file for emergency use authorization with the FDA, which is nearly 95% effective. That means vaccine distribution could start happening within just a few weeks. Failure to deliver it on time can bring a sell-off in stocks. Besides, even all this positive news did not help the market to break the resistance. The weekly chart has clear RSI divergence and an ‘Island” pattern. Another failure to break to the upside can bring the SP500 back to 3200. And if that happens we can get big gains on managed accounts.
It was reported that Senate Majority Leader Mitch McConnell has agreed to resume talks with Democrats on another pandemic relief bill. However, Congress is also readying for negotiations on government funding that needs to be passed before a December 11 deadline, which, if missed, could lead to a government shutdown.
There is a lot of skepticism about whether Republicans and Democrats can successfully negotiate both a stimulus and funding deal amid the current political animosity. Nothing probably happens with any type of new stimulus until we figure out who will be sitting in the White House after January 20.
Despite coronavirus infections continuing to surge and more communities across the U.S. implement measures to stop the spread, we see strong enough economic reports.
New Jobless Claims ticked up by about +30,000 last week but the 4-week moving average fell as did Continuing Claims. The data does not indicate that the surge in Covid-19 cases is translating to widespread job losses, at least not yet.
The pandemic has certainly not been bad news for the housing market with October’s Existing Home Sales skyrocketing to a seasonally adjusted rate of 6.85 million, more than +26% above last year’s level and the highest rate since February 2006.
Sales of homes over the $1 million mark more than doubled last month while declines were witnessed at the lowest range. Mortgage rates this week hit a new all-time record low for the 13th time this year.
With all these in mind, we can only rely on pure technical analysis. “Island” formation and bearish divergence can be early reversal signs. However, breaking above weekly resistance can result in an aggressive rally to 3900 in extension.
Wishing you a great week!
Sign up to our Newsletter
(We do not share your data with anybody, and only use it for its intended purpose)
The article was written and published on Yahoo Finance, Benzinga, and FXStreet. Dollar bears love hearing that Joe Biden will appoint Janet
The article was written by me for FXStreet. Mixed fundamentals resulted in flat trading last week. Coronavirus vaccines are coming. Moreover, there
No Representation Is Being Made That Any Account Will, Or Is Likely To Achieve Profits Or Losses Similar To Those Discussed Within This Site, Support And Texts. Our Forecasts and other Texts on this Website Should Be Used As Learning Aids. If You Decide To Invest Real Money, All Trading Decisions Are Your Own. The Risk Of Loss In Trading Commodities and Stocks Can Be Substantial. You Should Therefore Carefully Consider Whether Such Trading Is Suitable For You In Light Of Your Financial Condition.
Futures and stock trading is speculative. It involves the potential loss of investment. Past results are not necessarily indicative of future results. Futures trading is not suitable for all investors.