FOMC Impact: Will the Stock Market Rally Continue? Uncertainty is on the rise!
Fullhapce Intelligence employs artificial intelligence and physics-based models to analyze market trends for swing traders, providing comprehensive reports and analysis on a daily, weekly, and monthly basis. Investors should be aware that our sector analysis may experience rapid changes due to the dynamic nature of swing trading, with 'short-term' referring to a period of several days in this context. Investors need to recognize that what is presented in this video and a long-term value investing strategy are of a very different nature. Fullhapce Intelligence disclaims responsibility for the results of any investments made.
This video data is as of September 23, Monday.
If you want to see the market forecast first, go to slide 6.
Howdy, Swings!
Today's PMI results were mixed, and the market was boring, but as expected, it closed slightly higher.
However, the daily volatility was much lower than expected and the market closed slightly higher at SPX 5720.
Will this boring, weak market rally continue tomorrow?
Let's take a look at Fullhapce’s Daily swing market forecast and explore the possibilities.
Let's review Daily Market Index Movements.
Market indices were generally up, but the Russell didn't move.
SPX: 5718.57, 0.28% up.
Dow Jones: 42124.65, 0.15% up.
NASDAQ: 17974.27, 0.14% up.
Russel 2000: 2242.6, -0.08% down.
Let's look into Daily sector performance.
Utilities, discretionary, restaurants/fast food, energy, transportation, REITs, consumer staples, housing, and aerospace/defense were the best performers.
Financials, health care, and technology declined
Let's take a look at some of the reasons why.
Monday's trading session was largely quiet and uneventful.
Brent crude oil prices fell by around 0.85% despite rising tensions between Israel and Hezbollah.
Concerns about falling consumption and rising supply also contributed to the decline in oil prices.
Preliminary purchasing managers' index (PMI) readings in the US showed mixed results, indicating both growth potential and inflationary concerns.
Chinese stocks rose on growing optimism about government stimulus programs.
Here are the Things to consider.
The latest US purchasing managers' index (PMI) for September suggests that the economy is still growing at a healthy pace.
Chicago Fed President Golsby said that further rate cuts will be needed next year to maintain stable growth.
Weak PMIs in the eurozone support the European Central Bank's decision to keep monetary policy loose.
China is expected to take stronger steps to stimulate its economy, having recently cut its 14-day reverse repo rate by 10 basis points.
Oil prices are stabilizing due to concerns about global growth and consumption and a calming of the situation in Lebanon.
Boeing shares rose after the company increased compensation payments to striking workers to resolve a labor dispute.
Here we present the Daily Market Forecast for swings.
Weekly market upside potential remains strong and volatility is low.
On the other hand, with today's weaker gains, the daily market upside potential has become marginal and volatility and uncertainty have increased.
As a result, market direction is difficult to predict, and with the market moving sideways in earnest this afternoon, investors are questioning the market's direction and waiting for another event to provide some certainty.
It's hard to predict, but it looks like Tuesday the 24th will be a boring day, with the market possibly closing slightly higher, and the extent of the gains will depend on the strength of support reacting to downside stress.
There may be some boring, weak rallies after that, but until we have a clear boosting event, we don't expect much to change.
Let's explore some additional insights.
Strong economic growth, low inflation, accommodative monetary policy, and good corporate earnings are expected to continue to support the bulls despite the current high stock prices.
Looking ahead, important events for the market will be the economic data released in September and third-quarter earnings.
The fiscal challenges facing the U.S. government in 2025 are becoming increasingly serious.
Let's look at the counterarguments.
The opposing scenario is that the market will move down to SPX 5650 and test support there.
The rationale for this scenario is as follows.
European economic indicators show a significant decline in growth.
U.S. economic indicators show inflationary pressures are rising.
Minneapolis Fed President Kashikari warned that interest rate cuts will be slower than last week's 0.50% cut.
Geopolitical risks in the Middle East are growing.
Congress is expected to pass a temporary funding bill on October 1 to prevent a government shutdown, but major fiscal problems are unavoidable until 2025, which will affect markets regardless of the election outcome.
Boeing is in the second week of a strike, and labor disputes pose a risk to the U.S. economy.
Technology competition between the US and China is intensifying as the US bans the use of Chinese technology in self-driving vehicles sold in its borders.
Taking all into account, We think the opposite scenario is also a somewhat of a possibility.
Traders who are sympathetic to the opposite scenario may want to consider being a little less bullish and place minimal trades.
The Conclusion is as follows.
We believe that the weekly market is in an uptrend, but the daily market has become uncertain with minimal bullish potential.
We think there could be a rally on Tuesday, but it could be boring and weak as there are no events to help.
After that, we are likely to see some bearish tests.
Traders who agree with our forecast can remain bullish and even consider doing nothing.
Also, traders may be wise to consider both out main forecast and opposition scenarios to manage risk effectively.
Thank you for watching.
Fullhapce Intelligence, the best investment partner for swing traders.