Courtesy of John Nyaradi.
I predict an S&P 500 rise for Tuesday based on “progress” in Congress
I predict an S&P 500 (NYSEARCA:SPY) rise for Tuesday, based on movement within Congress to avoid a debt default. The S&P 500 (NYSEARCA:SPY) rose .41% yesterday, the Dow Jones Industrial Average (NYSEARCA:DIA) rose .42% yesterday, and the NASDAQ 100 (NASDAQ:QQQ) rose .62% yesterday.
My S&P 500 (NYSEARCA:SPY) prediction was wrong for Monday, as I anticipated more Congressional bickering and thus lower stock market prices ahead. Although my prediction was correct for the first part of the trading day yesterday, Congress did decide to move, so one cannot be correct 100% of the time, unfortunately.
So for Tuesday, Senator Harry Reid appears to be “very confident” that the Senate will reach an agreement, despite the fact that that said agreement has to be pushed through the House and then through the President to avoid a default. It appears that investors do not think a debt default will actually happen, judging by investor euphoria based on glacial movement by Congress in the last few days. I may be wrong, but I think we might be looking at red markets before October 17th if Congress does not solve this quickly. For now however, I think we are looking at a green day for stock markets and the S&p 500 (NYSEARCA:SPY) for Tuesday.
From a technical perspective, the S&P 500 (NYSEARCA:SPY) looks incredibly bullish, with a positive MACD (.430) and an uptrend in the RSI (58.72). The RSI has yet to reach overbought levels and the MACD is on a tear, so the technicals certainly support the notion of an up day tomorrow, at least for now:
chart courtesy of stockcharts.com
Internationally, European markets finished mixed yesterday, likely still skeptical over current Congressional woes. Asian markets appear to be more optimistic however, with both the Nikkei and Hang Seng indexes trading in the green as of the time of this writing.
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