To The Moon

Keywords:

• Market positioning sentiment at recent lows is very bearish, a near-term technical rebound in the $S&P 500(.SPX)$ is needed.

• From a macro and micro perspective, we are more inclined to see the $S&P 500(.SPX)$ bounce further to the upside on Thursday.

Disclaimer: the comment in this post is for communication purpose only, not for investment advices directly.

1. FED suspended interest rate hikes and U.S. bonds fell. Will the $S&P 500(.SPX)$’ technical rebound continue?

The FOMC announced that it would continue to maintain the target range for the federal funds rate at 5.25% to 5.50% on Thursday afternoon Eastern Time, in line with market expectations.

This is also the second consecutive meeting of the Fed to suspend interest rate hikes. Although Powell emphasized at the press conference that "it is not impossible for the Fed to return to raising interest rates, and it is not currently considering cutting interest rates."

CME Group's tools show that the bank's probability of raising interest rates in December is less than a quarter, and the market generally expects to start cutting interest rates in 2024.

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The same day, the U.S. Treasury Department announced the refinancing scale was lower than the market's previous expectations, which suppressed U.S. Treasury yields lower than 3% which turned to boost the stock market.

$S&P 500(.SPX)$ is on track for its best Fed day in 10 meetings (it rose 2.6% in July 2022 amid a broader stock-market rebound). $S&P 500(.SPX)$ has closed up for three consecutive trading days this week .

Prior to this, $S&P 500(.SPX)$ fell by 10% from the July highest point, and a short-term technical rebound needs become more obvious.

2.Regarding the a short-term technical rebound, how mature trades think?

Chinese global economic strategist @HONGHAO pointed in his member’s letter:The market's positioning sentiment at recent lows is very pessimistic, and there is a need for a short-term rebound of $S&P 500(.SPX)$ , and the $NASDAQ(.IXIC)$ has already stood above the 200DMA after struggling at the 200DMA.

@SCRTraders from X platform who provides a high-performing investment service in financial assets. pointed: The ongoing rebound in $S&P 500(.SPX)$ indicates an imminent test of previously breached support levels within the cluster zone, ranging from 4248 to 4273. A subsequent downward bounce from these levels presents another opportunity for short selling, with immediate targets at 4105 and 3998.

Source: X platform

Chart trader, Aksel Kibar, CMT @Techcharts says $S&P 500(.SPX)$ is heading towards the 200-day average, a possible resistance. Since August I'm seeing lower lows and lower highs. Also I'm not seeing a short-term bottom reversal here.

3. Can the $S&P 500(.SPX)$ break above the 200DMA on Thursday?

From a macroeconomic perspective, Initial Jobless Claims will be released at 8:30 a.m. ET. on Thursday,

• If this data is in line with expectations, it suggests that the economy is still doing well and interest rates will be raised in the future, which could have a negative impact on the $S&P 500(.SPX)$.

• If they significantly exceed expectations, it means that economic fundamentals may not be as good as expected, and the FED may delay the pace of rate hikes further, which would be positive for the $S&P 500(.SPX)$ in short term.

Fortunately, from a micro perspective, heavyweight capital company $Apple(AAPL)$ earnings will be announced after-hours on Thursday. Then, the impact of individual stocks on the market may weaken on Thursday, and it is reported that $Apple(AAPL)$ will beat expectations.

Other earnings releases, Feel free to comment on any stocks below that you may interested in $Eli Lilly(LLY)$ , $SHELL PLC SPON ADS EACH REPR 2 ORD SHS(SHEL)$ , $Novo-Nordisk A/S(NVO)$ $ConocoPhillips(COP)$ $S&P Global(SPGI)$ $Starbucks(SBUX)$.

Finally, combined with Wednesday's closing, Mega 7 has performed well in recent days. Taken together, we are more inclined to see the $S&P 500(.SPX)$ continue to rebound upward on Thursday.