ChristopherCarrollSmith

One last big S&P 500 meltup likely

Long
SPCFD:SPX   S&P 500 Index
Yesterday the S&P 500 briefly made a bullish trend line cross before pulling back below the trend line . This is what you might call a "bullish rejection," because it actually got across the trend line before pulling back. Often such rejections portend that a bullish move is coming, but won't happen right away.

Possibly we will see a dip to a support level before making a successful cross with a close above the trend line . I think that's the most likely outcome in the event that Trump refuses to concede and there's unrest or a protracted legal battle. Should Trump concede, I think we could see an immediate bullish trend line cross as the nation breathes a sigh of relief that there won't be rioting.

Typically, the longer you spend at a resistance level , the more likely that the resistance level will be breached. So the fact that we're hovering near the trend line today rather than pulling back from it bodes well technically for getting across the line.

In fundamental terms, I think it likely that there will be one last meltup on news of a new stimulus bill, whenever one materializes. The parties may wait until Senate races are decided, so that they know what their bargaining power is in negotiations. Investors, however, may not wait to start speculating on the stimulus they know is coming. With election uncertainty resolved and Q3 earnings looking pretty good overall, I think the meltup could soon begin in earnest even without any definite stimulus news.

I'd caution that the market is very overvalued here-- less so if you take into account how low interest rates are, but still multiples are at historically high levels and there will likely be a correction at some point in the next couple years, especially due to multiple compression if interest rates begin to return to normal levels. (Large corrections often come in the second year of a president's term, according to election cycle theory.)
Comment: Obviously today's breakout appears to confirm the view that a meltup is likely. We will see likely continue to see value outperform.
Comment: With several states going back into lockdown, I think we reverse downward hard Monday morning.
Comment: Lockdown news was canceled out by news of the Moderna vaccine. Not only is it 94.5% effective, but it also can be stored in a home refrigerator for 30 days (whereas the Pfizer vaccine requires specialized cold storage equipment).
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Comments

Very helpful analysis and interesting thoughts @ChristopherCarrollSmith
Many thanks.
+2 Reply
Haven't you heard the news that the intelligence made sure that the legitimate ballots got marked with blockchain encrypted invisible watermark? This is just hilarious for those that put in fake ballots in.

Intelligence Insider: President Trump Setup Democrats In “Sting Operation” To Catch Them Stealing Election!
https://banned.video/watch?id=5fa480cc65f2d419a08b54e2

https://www.thegatewaypundit.com/2020/11/huge-exclusive-keep-faith-president-trump-will-win-election-based-constitution-per-retired-intel-operative-tony-shaffer/

So my question. What do you think happens if Trump is the winner after a recount and weeding out of fake ballots?
+2 Reply
@Goldhead, America is so, so tired of conspiracy theories.
+1 Reply
Goldhead davidismyname
@davidismyname, What conspiracy theories?

If you refer to the announcement of Dr. Steve Pieczenick that I have posted a link above. Then this is more like a counter-conspiracy "theory" at the moment. But my take is that you will hear from official US government sources soon that ballots were marked the way he describes they were marked. Then this is no longer a "theory" but a fact of a carefully planned counter-conspiracy operation to thwart election meddling.
+1 Reply
amg1ne Goldhead
@Goldhead, get some help
+3 Reply
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