U.S. stocks dropped Thursday on news reports that President Biden is considering nearly doubling capital gains taxes on the wealthy. Mr. Biden is planning a capital gains tax increase to as high as 39.6% on the wealthiest Americans, an increase from the current 20%.
The S&P 500 futures have been potentially forming yet another bullish formation on its hourly chart during the last 6-7 trading sessions: a Bull Wedge. For this pattern to play out, ES needs to hold above today’s lows during the next 2-3 sessions and eventually move above the 4200 level.
The bullish narrative is supported by the SPXA50r indicator which didn’t confirm today’s low (see chart below).
SPXA50r and SPX, 15m