The market remains complacent even though the two-day meeting of the FED is set to commence today, and central bankers are expected to raise interest rates by 75 basis points tomorrow. Despite that, however, we remain bearish and believe the reality will sink in after the FOMC, and the rally will cease. Indeed, we believe the market will progress deeper into the second phase of the bear market, which has been confirmed by the weak earning season for the third quarter of 2022.
Although with that being said, we would not be surprised to see one more push to the upside as an initial reaction to the FED decision, with investors again seeking to buy stocks at a discount and looking for a reversal in monetary policies. Regardless, we do not backtrack on our price targets at 3 500 USD and 3 400 USD.
Illustration 1.01
Illustration 1.01 shows the daily chart of SPX and two simple moving averages. It also depicts previous bear market rallies and the current one. At the moment, the SPX remains down almost 19% from its all-time-high value.
Technical analysis - daily time frame
MACD is bullish; we will pay close attention to whether it can hold above 0 points; if not, it will be very bearish. RSI and Stochastic are bullish. DM+ and DM- are bullish as well. Overall, the daily time frame is bullish.
Technical analysis - weekly time frame
RSI and MACD are neutral. Stochastic is slightly bullish. DM+ and DM- are bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Although with that being said, we would not be surprised to see one more push to the upside as an initial reaction to the FED decision, with investors again seeking to buy stocks at a discount and looking for a reversal in monetary policies. Regardless, we do not backtrack on our price targets at 3 500 USD and 3 400 USD.
Illustration 1.01
Technical analysis - daily time frame
MACD is bullish; we will pay close attention to whether it can hold above 0 points; if not, it will be very bearish. RSI and Stochastic are bullish. DM+ and DM- are bullish as well. Overall, the daily time frame is bullish.
Technical analysis - weekly time frame
RSI and MACD are neutral. Stochastic is slightly bullish. DM+ and DM- are bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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