$S&P 500(.SPX)$

Party Pooper!

Just when everyone was enjoying July and August rally, in came Sep and potentially Oct to spoil the fun.

After last night's confirmation of 75bp hike, the expected relief was short lived. 

Markets tumbled further and closed red, with SPX hanging on to 3790 support. RSI-14 is at 33.74 now. See first plot.

If it dips under 30, then index might be considered oversold. We need to watch next few days for this signal. The NASDAQ RSI is slightly higher at 34.93.  

If the index dips below 30 but crosses back the 30 mark subsequently, it might be a bullish signal to buy in for a rally. 

However, there's one more impending consideration - midterm elections happening 8 Nov.

Second and third plots show average SPX returns are flat or negative, right up to end Oct. There's also higher volatility for daily returns of individual months in mid term election years. Once mid term elections are over, the SPX generally rises till year end. This is because uncertainty in terms of governance is removed.  

Towards year end, we will also have more CPI data and stronger indication from the Fed in terms of rate hike targets. With more certainty, we might be able to get the party started again. 🥳🎊🎉

@TigerStars@MillionaireTiger@Tiger_chat