Markets To Remain Range Bound

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Markets To Remain Range Bound

Markets To Remain Range Bound - Wells Fargo

According to analysts from Wells Fargo, the stock markets of the US will remain range bound. They added that this will continue until the US elections are concluded in November.

The S&P 500 is already down by 9.7% if we look at the peak from July to today's price levels. Wells Fargo believes that the S&P 500 index is now stuck between support and resistance. This is a classic example of range-bound movement and similar stories are seen in other US markets.

S&Amp;Amp;P 500 Stuck Between 200 And 50 Sma

Wells Fargo added that the US stock markets are now stuck in no man's land as the 200 SMA near 5044 is now acting as support. Similarly, the 50 SMA near 5452 is now acting as resistance.

It seems that the recent decline in the market is driven by divergence in the central bank's policy along with weak economic data. At the same time, the traders have also closed their JPY short positions.

Amidst all of this, the S&P 500 is still in the uptrend; At least, that's what the analysts at Wells Fargo believe! However, the chances of any major moves in the index are unlikely due to the US elections, monetary outlook, and economic conditions.

There's a good chance that the S&P 500 index will fail to make any big moves higher or lower. Once again, the 200 SMA and the 50 SMA will continue to act as important dynamic levels for the index.

However, the current market conditions might be suitable for traders who like to buy at support and sell at resistance. But, the range-bound movement of the S&P 500 is a big no-no for the trend traders.

While we wait for the US elections in November, let's not forget that rates will also start to go down starting next month. Naturally, this is a good thing for the US stock markets, which have been experiencing an era of high rates for years.

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