Joe Biden Supporters. Image source: Gage Skidmore, flickr.com
Just a couple of hours earlier, it was revealed that in the state of Georgia, which bears sixteen electoral votes, the tide of the presidential race has turned. Joe Biden now clinches the victory with a marginal lead of several thousand votes.
This republican bastion, which hasn't gone blue since 1992, looks poised to go to Biden this time, in what would deliver the final blow to Trump's ambitions for re-election.
Many experts expected a landslide victory for the democrats according to findings of the preliminary polls, but the overall turnout for the GOP was much bigger than initially anticipated.
Despite Biden's decisive win in the popular vote, where he leads with several million votes, the neck in neck electoral race was interpreted by many as a sign of massive polarization of opinions in the US. This, in turn, was perceived as an additional source of uncertainty for the future of the American democracy and economy.
Yet, such baseless fears are ungrounded in so far as they fail to factor in the changing demographics in the States. Georgia is a perfect example of this, as its unexpected support for Biden is illustrative of people's overwhelming desires for a change, even amongst voters who had historically been leaning towards the GOP.
Despite Trump's premature claims to victory and subsequent calls to stop counting the remaining votes, the democratic institutions in the States have demonstrated stability, which is a good sign for the future wellbeing economy as well.
For markets, what remains is to wait for the outcome of the election to be definitively confirmed, so that they can price in these results without being impeded by any adverse uncertainty.
What remains for the stock market, in particular, is to gradually overcome the fallout from the elections now that most of the aforementioned uncertainty should start to wane.
As can be seen on the 4H chart below, the S&P 500 is about to test the strength of the descending trend line, which was already caused rebounds on two separate occasions in the past.
The prevailingly bullish outlook is affirmed by the fact that the price action managed to break out above the 50-day MA (in green) and the 20-day MA (in red) yesterday, which clears the way for the index to climb towards the historic resistance at 3588.1 once again.
If, however, a third rebound from the descending trend line takes place, the S&P 500 could pull back towards the major resistance (currently support) level at 3400.0, before it finds the necessary bullish commitment to resume trading higher.
S&P 500 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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