Home » Stocks Finish Lower As The Bond Market Thinks Twice About The Fed Pivot

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Stocks Finish Lower As The Bond Market Thinks Twice About The Fed Pivot

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10/31/22

#STOCKS – $DOCU

#MACRO – $SPY, #RATES, #DOLLAR, #GOLD

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Happy Halloween, I’m going to keep today to the point. It was a pretty boring day, to be honest. The S&P 500 gapped lower and traded sideways, finishing down 75 bps. Today looked like a pause day that typically follows a big up or down day. We have seen these pause or consolidation days on several occasions in 2022, and a continuation of the previous move can sometimes follow these pause days.

Tomorrow is also November 1, which means there will likely be monthly inflows.

The Intraday chart shows what could be a bull flag/pennant that has formed, which would suggest a move higher from here as well. With the potential for the S&P 500 to rise to around 3950.

Rates

Today Fed Fund futures were thinking again about the potential for the Fed to turn all dovish. The April contract saw its rate rise to 4.95% today, almost back to the 5% it was trading at on October 20.

The move higher in the Fed Funds futures also helped to lead the 2-yr higher, and it appears to have broken free of a bull flag pattern. If this works out, I think we should see the 2-Yr trading above 4.6% over the next couple of weeks.

Dollar

The dollar also moved higher today; for now, I think it can move back to around 112.

Gold

A few weeks back, I noted that I thought the gold could fall back to $1,560. After some consolidation, it looks like it is getting closer to that happening, with $1,625 being the support price that needs to break.

DocuSign (DOCU)

DocuSign almost looks like it is forming a bear flag, which could mean the stock falls. It could result in the stock falling back to around $38, a price not seen since January 2019.

That’s all for today.

Mike

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