Courtesy of John Nyaradi.

I predict an S&P 500 decline on Monday due to the unending Congressional impasse

I believe the S&P 500 (NYSEARCA:SPY) will decline on Monday because the United States defaults this Thursday and Congress has yet to stop it.  The S&P 500 (NYSEARCA:SPY) and major equity markets soared last week, with the S&P 500 (NYSEARCA:SPY) rising .63%, the Dow Jones Industrial Average (NYSEARCA:DIA) rising .73%, and the NASDAQ 100 (NASDAQ:QQQ) rising .83% to finish out a volatile week.

With just three days left until the United States defaults on its debt and with no movement coming out of the House or Senate as of Sunday night, I do not see investors reacting well to the fact that Congress has yet to fix this crisis.  Last week we all witnessed the reactions from Wall Street regarding a “no-deal” versus “we might have a deal” mentality, which took the S&P 500 (NYSEARCA:SPY) down and then up 3% within just three days.  Investors seem very scared of this situation, so scared as to buy on a rumor of good news and then sell on just plain bad news.  In that respect, have investors really changed?

From a technical perspective, the S&P 500 (NYSEARCA:SPY) has a rising RSI (56.74) which suggests an uptrend for now, but the MACD is still in negative territory (-1.410), albeit rising in the positive direction.  The S&P 500 (NYSEARCA:SPY) appears to be in very bullish territory after last week, so it will likely take a US default threat to bring it back down.  As it just so happens, the bears might just get what they are looking for come Thursday:

chart courtesy of stockcharts.com

Internationally, both European and Asian markets finished in the green last week, but Nikkei futures are currently in the red, despite a stock trading holiday in Tokyo on Monday.

US futures markets are also trading heavily in the red at the time of this writing, also suggesting lower prices tomorrow.

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