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Trends & Analysis
News

Week Ahead Preview: 17th of February

News

Europe stocks hit record high on strong earnings

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BRIC currencies mostly gain as US inflation rises

News

Refresh your portfolio with Coca-Cola?

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GBP/USD price may rally to multi-week high

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EIA ups oil output forecast, but supply fears loom

Trends & Analysis
News

Week Ahead Preview: 17th of February

News

Europe stocks hit record high on strong earnings

News

BRIC currencies mostly gain as US inflation rises

News

Refresh your portfolio with Coca-Cola?

News

GBP/USD price may rally to multi-week high

News

EIA ups oil output forecast, but supply fears loom

Asset Watch

Could the S&P 500 rally 10%?

Wednesday, November 2, 2022

It’s decision day for the FOMC, and investors are expecting another 75 basis point rate hike. But after the Bank of Canada surprised the markets with a 50 basis point increase on Oct. 26, a similar move by the Fed could spark another risk rally.
While JPMorgan’s trading team described the outcome as the “most bullish” and the “least likely,” they said a smaller-than-expected rate hike and dovish rhetoric from Fed Chairman Jerome Powell could elicit a 10% rally for the S&P 500.
When analysing the various scenarios, they concluded, “we think the risk/reward is to the upside,” as “the market had every reason to retest [the] lows given the disappointment from megacap tech earnings and still moved higher.”
S&P 500 Stock Chart Trading View

So while volatility should be amplified, will the technicals provide the most important clue?

When examining the S&P 500’s two bear market rallies in 2022, both spurts of optimism coincided with the index rallying above and then holding its 10-day moving average. Likewise, when doubt crept in and short-term pullbacks occurred in July and August, the 10-day MA acted as support and higher highs materialised.

Therefore, with the 10-day MA ending the Nov. 1 session at 3,803.72, a close above or below the key level on Nov. 2 may determine whether or not there is more room to run.

As a result, should we expect a third bullish rendition, or will Powell play the villain during his press conference?


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