www.varchev.com

Money Flow – Key week for persistence of positive seasonality.

Thanksgiving week is known for positive seasonality, and this year was no exception. Friday’s half-day session was very slow and lackluster, but all indexes finished in positive territory for the week, with the Dow leading largely on Deere and the Nasdaq 100 trailing on weakness in large-cap tech.

The S&P 500 is trading below a strong resistance level around the diagonal resistance of this year’s descending channel. The question is whether the indices can build on the seasonal momentum as we move into some major economic events.

The bulls’ argument is that the market continues to have positive seasonality through the end of the year. The combination of underinvested investors and a desire for some growth at the end of the year could help the indices continue to rise.

The bears argue that this market is ignoring the Covid shutdown in China, the fact that the Fed is still quite hawkish, and the potential for a slowdown in economic growth. The Federal Reserve is yet to support the market, although market participants expect a 0.5% hike in December. This does not mean that the war on inflation is over.

This week will be a test of the durability of positive seasonality. There will again be statements from members of the Fed around 19:00 on Monday, who will again try to dampen the rally with hawkish comments. But the real test will be on Wednesday and Thursday with the release of US GDP, the jobs report, Fed Chair Jerome Powell’s statement, the release of the Fed’s Beige Book, followed by key data on inflation and the unemployment rate.

The market is likely to be nervous ahead of these events and there is likely to be an increased level of uncertainty causing high volatility. The week after that is the CPI report and the Fed’s December meeting.

There has been a pattern of optimism about the Fed and the economy this year that the facts do not support. We currently have another example of improved sentiment, but no real factual basis to support it. This does not mean that the market cannot continue the rally, but it creates a high risk of a sharp decline.


 Dealer Anatoliy Pavlov

Login to comment

* Rough, sarcastic and ironic language is not allowed. For such Admins Delete without notice.

Leave a Reply

Comments:

Leave a comment

Varchev Absolute Trader

борсова платформа

  • Търгувай над 3000 финансови инструмента: Crypto, Форекс, Акции, Индекси, Суровини, ETF-и
  • Използвай платформа с директно изпращане ордерите на борсите
  • Best Trading Platform - "Online Personal Wealth Awards" EU награждава Varchev Absolute Trader
  • Cloud base платформа - твоят трейдинг сетъп на всяко устройство
  • Traders Talk - чуй какво движи пазарите в реално време
  • Market Sentiment - търгувай с настроенията на инвестиционите банки
  • Top movers - най-горещите трейдове във всеки един момент
  • Stocks scanner - филтрирай най-подходящите за твоя трейдинг стил пазарни инструменти
  • Heat map - Търгувай в посоката на големите играчи


Read more:
RECCOMEND WAS THIS POST USEFUL FOR YOU?
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance
chat with dealer
CALL NOW