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S&P AND TRUMP: any last words?
2020-11-12 • Updated
How do you feel about dinosaurs going extinct? Probably, nothing. They just “had” to go. How do you feel about Donald Trump’s defeat? Should be the same logic: he just has to go. But he is not a dinosaur so he will not just go away like this. He still has a couple of months in the White House, and it looks like he will make some noise before he leaves. “Why such a condescending manner?” – because one needs to recognize and accept when it’s over. Donald Trump does have charisma – no one can take that away from him. Donald Trump does have a vision of how things ought to be done in the US and in the world – and maybe, this vision is the best for the US. But the American people don’t want it anymore. Fraud or not, it doesn’t matter – there are enough people out there to support the alternative direction offered by Joe Biden. “Make America great again” doesn’t have the momentum it used to have a couple of years ago. No one knows what Joe Biden will do to America, but what Donald Trump could have done – most people are no longer interested to know. That’s the end of political life. And Donald Trump refuses to face it. But that’s fine – we all choose where to look and what to listen to. But most of us have no influence on the world economy with our choice – Donald Trump has. And what is it now? It is a destabilization risk coming from the contested election – the market’s biggest fear since recently.
In numbers, that’s a downside potential for the S&P to drop to 3 200. In fact, that would be that 1o% bearish threat that observers have been discussing before the US Election results. Is there a probability of a stronger bearish incursion? Quite unlikely. In fact, the probability of a drop to 3 200 is pretty thin as well. Why? Because as of now, there is no solid proof of a large-scale fraud anywhere in the US. Of course, Donald Trump says it is all a fraud but for that, there is the entire and worldwide-envied American judicial system with all its fact-checks and procedures to satisfy both the plaintiff and the defendant and find the truth based on evidence. And until now, no evidence for a fraud has been found so far. For this reason, it would be fair to say that the real threat for the S&P is to get down to the middle of the channel – somewhere at 3 400 – in case Donald Trump goes all-in to question the results of the election but it should not take more than that. So stay calm and keep trading.
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