U.S. Stocks Trending Higher To Open The Week

Posted Monday, October 12, 2020 by
Shain Vernier • 2 min read

U.S. stocks are posting a strong rally to open the week, despite it being Columbus Day. At the midway point of the Wall Street session, the DJIA DOW (+244), S&P 500 SPX (+49), and NASDAQ (+246) are all trending higher. Although today’s U.S economic calendar is sparsely populated, we are seeing strong participation in the equities markets.

While finding a culprit for today’s rally involves some guesswork, most analysts attribute the gains to rising hopes over a stimulus package. Earlier, President Trump took to Twitter, lauding the booming uptick in stocks:

“Remember, Stock Market at an All Time High, and going up. 401k’s at RECORD. With Sleepy Joe comes Tax Increases, jobs losses and DEPRESSION like never seen before!!! VOTE!!!”

Trump’s enthusiasm comes as the polls are trending in the favor of challenger Joe Biden. It’s no secret that polling data is wildly unpredictable in calling any election Trump is involved in. However, today’s battleground polls from Real Clear Politics show Biden having a substantial lead in key states:

  • Florida: Biden +3.7
  • Pennsylvania: Biden +7.1
  • Michigan: Biden +6.7
  • Wisconsin: Biden +5.5
  • North Carolina: Biden +1.4
  • Arizona: Biden +2.7

In all honesty, these numbers look a lot like the Trump/Clinton polls from 2016 that missed the mark badly. However, the fact is this ― Trump will have a difficult time winning without Florida and Pennsylvania. According to RCP’s polls, sweeping these two states appears improbable, at best.

Stocks are driving higher as we bear down on the 3 November Election Day. For the S&P 500, prices are on the cusp of all-time highs.

U.S. Stocks Jump To Open The Week

In a Live Market Update from Friday, I outlined a topside resistance level at 3493.00 for the December E-mini S&P 500. This level proved to be ineffective, being swept out in a matter of minutes. 

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

Overview: As we move deeper into the week, it looks like new all-time highs are in the cards for December E-mini S&P 500 futures and U.S. stocks. For now, the only numbers on my radar in this market are the All-Time High (3576.25) and the 78% Macro-Wave Retracement (3493.00). If we see a daily close above 3493.00, new record highs are probable in the near future.

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