Fresh bids are hitting the U.S. equities markets this morning, despite stimulus doubts. At the midway point of the Wall Street session, the DJIA DOW (+209), S&P 500 SPX (+32), and NASDAQ (+144) are all in the green. The sentiment is clearly “risk-on” as progress regarding COVID-19 stimulus package number two has ground to a halt.

Lawmakers on Capitol Hill are presently exchanging jabs over proposed COVID-19 relief measures. In the past 24 hours, both House Speaker Pelosi and Senate Majority leader McConnell weighed in on the issues of stimulus and stand-alone relief bills:

  • Pelosi: “There is no stand-alone bill without a bigger bill. There is no bill.”
  • McConnell: “I’d like to see us rise above and do what we did back in March and April, but I think that’s unlikely in the next three weeks.” 

Of course, it’s important to remember that in politics, anything is possible. Breaking headlines allude to Trump raising his stimulus offer to $1.8 trillion, up from $1.6 trillion. According to “sources,” Trump has already approved a revised stimulus package. Ultimately, only time will tell how the political jousting shakes out.

Stimulus Doubtful, Stocks Rally Despite The News

December E-mini S&P 500 futures are on the bull, driving toward the 3500.00 psyche level. Currently, U.S. stocks are on track for their best week since August.

December E-mini S&P 500 Futures (ES), Daily Chart

As we roll into next week’s trade, there will be one level on my radar:

  • Resistance(1): 78% Macro Wave Retracement, 3493.00

Bottom Line: If a Congressional stimulus plan takes shape, then stocks are likely headed higher. Until elected, I’ll have sell orders in the December E-mini S&P 500 queued up from 3492.75. With an initial stop loss at 3496.75, this trade produces 16 ticks on a standard 1:1 risk vs reward ratio.

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