With Joe Biden winning the election and becoming the 46th US President, what might happen to the Straits Times Index (STI) for the week of 9 November?
 |
| Picture 1: STI daily chart via TradingView |
The bears converted into bulls
Last week, I mentioned that after reaching the 3rd support region, the STI may stage a rebound which can be short-lived. However, it was totally unexpected that this sharp fall had actually resulted in a sharp rise - even higher than the level prior to the fall.
Evidently, the bulls won during the week of 2 November.
STI touches the 1st resistance
With the bulls advancing strongly, it managed to pierce through the 2nd support region with strong gap up momentum. These were all in the midst of waiting for the election result to be released.
It touches the 1st resistance region and last Friday's candlestick was a red one. This shows some selling pressure right there.
What can happen to the STI next week?
The election result was released yesterday, after the market closed for the week. These price movements were in waiting mode back then.
Now that we know Joe Biden has defeated Donald Trump, this major news will create high turbulence in the market next week. Therefore, my take would be to stay on the sideline and have a wait-and-see approach first.
The STI can go either way, up or down - it can be extremely irrational next week.
