Dow Jones
The S&P 500 could be buoyed by a positive report regarding trials of the coronavirus vaccine candidate developed by Pfizer and BioNTech. BBC News reports that a Phase 3 trial on 43,500 subjects in the US, Brazil, Germany, South Africa, Turkey and Argentina, showed that the vaccine candidate achieved 90% protection in test subjects, with no safety issues.
This marks a significant step in the fight against the coronavirus. Emergency use of the vaccine, which works by using a part of the coronavirus’s protein to stimulate an antibody and T-cell response in the human recipient, could happen as early as December.
The S&P 500 is up marginally on the news.
The pattern on the daily chart of the S&P 500 index has been realigned after the bounce on the neckline by the 30 October candle negated the double top pattern.
As the S&P 500 stalls around this resistance, we now see what appears to be the early stages of a symmetrical triangle formation, with progressively lower highs that start at the all-time high of 3588.1, along with further tops at 3550 (October high) and 3534. Progressively higher lows at 3215 (24 July low), 3246 (24 September) and 3270 (30 October low) form the triangle’s lower boundary.
However, this triangle has a broad base, and suggestions are that price could play around the borders for a significant period before resolution.
US President Trump is starting a series of legal challenges to the outcome of the US Presidential election this week. This leaves the possibility of fresh swings lower from present levels, with targets at 3481.6 initially, followed by 3393.5 and 3335.5 (11 August, 28 September and 3 November lows). 3282.2 would be the remaining barrier that stands between sellers and the lower triangle border if this view holds true.
On the flip side, we need to see a price close above the descending upper trendline of the evolving triangle, along with a close above the 3550 October high, to see price complete the triangle’s resolution with the expected bullish move. This move would target the all-time high at 3588.1 as the initial target, with a chance at hitting new high somewhere around the 3600 psychological price area if 3588.1 gives way. Also, watch for a possible bullish golden cross of the 10-day moving average (red line) above the 50-day moving average (blue line) as further confirmation of this move.
