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The S&P gained 1.5% last week but greater uncertainties could be problematic for the bulls this week and may struggle below 3,400s. Technically, the price is stalling within a rising bearish wedge formation, FXStreet’s Ross J. Burland reports.

Key quotes

“There was little evidence of panic in price action, perhaps as it is presumed the US President will recover fairly quickly and that his ballot will not be withdrawn from the forthcoming US elections on November 3rd.  However, there is still a tail-risk that Trump does not recover quickly and markets will be vulnerable to headlines throughout the next week or two.”

“Prior to Trump’s hospitalization, Senate Majority Leader Mitch McConnell seemed cautiously optimistic the two sides are working toward middle ground. If the two sides do somehow manage to reach an agreement, it could take a week or more before it comes up for a vote. On the other hand, if negotiations fail, with Trump’s medical condition still under review, how likely is he to pursue unilateral action at this point? It is looking increasingly likely that talks may have to resume after the election but before the presidential inauguration on Jan. 20, 2021. US stocks are not going to like that.”

“The price is above the 21 and 50 4-hour moving averages and bullish cross. So long as the price continues to respect the channel, there is an upside target in the 3,400s. On the downside, a break of the channel opens prospects for an extended breakout if the bears can clear support in the 3,200s.”