The S&P500 has seen a remarkable push to its all-time highs in the last few hours following the developments around the US Presidential Elections. The price is currently sitting at the diagonal downward sloping resistance line (blue), which appears to be holding. Our analysis shows that if SPY fails for a third time at this resistance ($348-350), then the market will most likely form a Triple Top Reversal Pattern. This in turn would immediately shift the sentiment in the market from bullish to bearish, as a Triple Top formation on the daily timeframe is a very solid reversal signal.
Now, it is important to note that the Triple Top formation would not be considered in play until we see a break to the downside of the neckline, which is currently at $325. However, with all of the uncertainty surrounding not only the US Presidential Elections, but also the 2nd wave of COVID-19 and BREXIT, we at DowExperts believe that the risks are skewed to the downside. Thus, we would advise all market participants to exercise extreme levels of caution in the current environment.
Stay safe out there!
Kind regards,
DowExperts
Now, it is important to note that the Triple Top formation would not be considered in play until we see a break to the downside of the neckline, which is currently at $325. However, with all of the uncertainty surrounding not only the US Presidential Elections, but also the 2nd wave of COVID-19 and BREXIT, we at DowExperts believe that the risks are skewed to the downside. Thus, we would advise all market participants to exercise extreme levels of caution in the current environment.
Stay safe out there!
Kind regards,
DowExperts
