? S&P 500 Struggles to Break 3185 During US Election Cycle ?

Dear traders,

The market is apparently struggling to break above the 3185 resistance in the SPX. For the third day in a row, the market tried to go above it but failed.

This article reviews the SPX, Nasdaq, and what to expect from the technicals and charts.

US Election Drama Accelerating

We have an election cycle taking place in the US where dirty tricks are not avoided. This means things will get goofier the closer we get to November… 

Plus the Coronavirus is still hitting hard. It is very likely we will also see major cities wanting to shut down again at the end of October.

The uncertainty of the economy is not really helping. About 80% of the companies are unable to estimate what their earnings will be. There is a COLD WAR with China, that is technically not acknowledged yet. 

On the other side however, the market can shrug anything off when the Fed is burning $1,000 bills to keep the economic furnace going.

Options for Trading the Market this Week

In this uncertain situation, the nasdaq is rallying. TESLA (TSLA) made a run above 1400 before closing higher by only 18.28 at 1,389 and AMZN broke above 3,000.

It is hard to say if and when the market will actually break above 3185 in the SPX. So it is better to get some type of bearish insurance with a PUT or BEAR PUT on the SPY.

This resistance seems to be holding. So we might see some selling for a while until we’ll see the market try to break above 3184 again. If and when it will try to break the resistance zone, then it will depend if the breakout succeeds or will it be a false breakout.

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Good trading,
Marco Doni – ecs.OPTIONS expert and CNBC contributor

The articles are not intended to give any advice on how to invest money, they are just for educational purposes.