Daily Alert – Wednesday 14th October 2020: S&P500 stalls just below major resistance

Mark Nugent Daily Alert, Oct 2020

Daily Alert – Wednesday 14th October 2020: S&P500 stalls just below major resistance

It was a quiet start to the week with the US on holiday for Columbus Day. Sentiment was moderately risk-on. I did not enter the S&P long at the end of the day as the Monday move up was large, it was the fourth consecutive bullish candle and the close price was very near the all-time high which will almost certainly be a resistance point.

I also looked at sentiment-driven JPY weakness (as we aere risk-on), but the JPY was actually strong on Monday, so I avoided that trade as well.

Tuesday saw sentiment turn to moderately risk-off as both J&J and Eli Lilly halted their Covid vaccine trials for safety reasons, and hopes of a US Covid relief bill faded.

Today the GBP is rising after PM Johnson said he would not walk away from Brexit talks as we approach his self-imposed deadline of 15th October. The real deadline is the end of the month.

Currently (1630 BST) risk sentiment is indecisive. I will not enter any trades until I can see solid risk sentiment, either on or off, and a rationale for it. Also, I will only trade sentiment-driven forex moves if the currencies are acting in the way we expect based on that sentiment, as the JPY clearly was not doing on Monday.

I’ll be back on Friday.

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