FxWirePro: S&P 500 declines for eight consecutive days, further downside likely towards 2050

Yesterday, we warned that the S&P 500 is on its way to decline for eight consecutive days, which are very rare. S&P 500 did and it is the first time since 2011 when the financial markets were hit by a combination of Eurozone debt crisis and United States’ debt ceiling dilemma. Before that, it was back in 2008, of course, we all know, what happened then. In past three decades, there have been only six instances (including the current) where S&P 500 index declined for eight consecutive days and in many of those cases, a financial crisis or turmoil has followed.

So, it’s important to stay cautious, Though we currently forecasted for the S&P 500 to move higher. The index has gone jittery in the recent days over the uncertainties surrounding the outcome of the US election. The possibility of a Trump win isn’t being viewed as favorable by the market due to uncertainties surrounding his policies like building a wall for which Mexico would pay, despite the fact that his tax policies would be a major boost for the index.

We suspect that the fear of uncertainties likely to persist in the near term and the index could move lower, at least towards 2050 area. Key support lies around 2000 mark.