Today, the S&P 500 was able to make strong gains again. However, in a still uncertain environment. The probability of short-term pull-backs is high. On the one hand, the VIX is still trending above the important 50-day line and, on the other hand, the Relative Strength Index was unable to breach the 48.5 thresholds. Thus, the upward trend that began in mid-August remains intact for the time being and should provide further volatile trading days in view of the upcoming election.
However, since the successful breach of the 50-day line, the trend has faltered slightly. Since mid-September, the VIX has been trading in a range between 25 and 31 percentage points.
The pressure on the stock markets, especially in the S&P 500, could increase considerably if the upper side of the trading range at 31 points can be sustainably overcome. This would confirm the trend continuation pattern and activate the price target at 38 points.
On the bottom side, the lower side of the trading range and the 50-day line act as a support area. Only a breach of the area around 25 points could dampen the downward risk.
However, since the successful breach of the 50-day line, the trend has faltered slightly. Since mid-September, the VIX has been trading in a range between 25 and 31 percentage points.
The pressure on the stock markets, especially in the S&P 500, could increase considerably if the upper side of the trading range at 31 points can be sustainably overcome. This would confirm the trend continuation pattern and activate the price target at 38 points.
On the bottom side, the lower side of the trading range and the 50-day line act as a support area. Only a breach of the area around 25 points could dampen the downward risk.