Indices Remain Firm Ahead of the Midterm Elections

This Tuesday is all about the US congressional elections. Ahead of the final results, the markets are quite optimistic, anticipating a Republican win. Once it’s official, stocks will most likely rally further, at least that’s what the consensus is among leading experts.

Tuesday’s also bringing us a reversal on the dollar, which isn’t happening in a random place. Yesterday the EURUSD ended slightly above parity and now sellers are trying to pull the price lower. Level 1 is definitely a good place to initiate a bearish correction.

Commodities are mostly flat with a slight advantage for sellers, especially on gold. Here, a 1680 USD/oz resistance persists and is still too much for buyers. Remember, should the price close a day above that area it would mean an amazing, long-term buy signal. Oil has already had a buy signal for some time now, but watch out for the 100 USD/bbl00. resistance on brent oil. I guess the importance may be similar to parity on the EURUSD and since the end of August, buyers are unable to close a day above that area.

Indices are flat but close to mid-term highs. We also had a good session yesterday and of course on Friday, therefore a break is needed and understandable.

After-hours trading brought us a few interesting moves, mostly to the downside. Lyft, Take-Two Interactive, TripAdvisor, all dropped around 15% based on disappointing earnings report.

Today, we’ll find out the numbers for Walt Disney, Bayer and Deutsche Post.

Lastly, we’ll close with a quick look on the Fear and Greed Index. There was a month, when we were in the extreme ‘Fear’ territory and not long after, stocks initiated a bullish bounce. Currently the sentiment is on 63/100, which means ‘Greed’. Does that mean that the bullish correction is entering final stages?