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S&P 500 Forecast: November 2022

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The S&P 500 rallied significantly during the bulk of the month of October, but as we head into the month of November, one of the first things we will see is the Federal Reserve monetary policy statement. The Federal Reserve is expected to raise interest rates by 75 basis points, but there is a huge bifurcation between traders as to whether or not they continue to be very aggressive, or if they start to slow down the pace of rate hikes. This has been further exacerbated by the fact that the Bank of Canada and the Reserve Bank of Australia both have recently raised less than anticipated.


That being said, the market did bounce from the 200-Week EMA, which is a technical indicator that a lot of people like. However, we have plenty of areas just above that could cause some resistance, with the first one being the 3900 level. If we break above there, then it’s possible that the 4000 level could be targeted. The 4000 level is a large, round, psychologically significant figure, so would not surprise me at all to see this market show signs of exhaustion in that general vicinity.

Underneath, the 3600 level should continue to offer a bit of a floor the market, and as long as we can stay above there, it’s likely that the market will continue to see at least some fight to stay afloat.However, a lot of this is going to come down to have traders interpret what Jerome Powell has to say going into the end of the Wednesday session of the first week of the month.

The market will certainly be very volatile heading into the end of the year, and I’m already starting here some of the usual suspects talk about the “end of the year rally”, or the “Santa Claus rally” that so many people bank on every year in order to pad their returns for clients. Whether or not we get that is completely open ended question at this point, but I still remain bearish until the Federal Reserve stops being so aggressive. At this point, inflation is almost 4 times what the Federal Reserve looks to achieve, so I do believe that the Fed will continue to jump on the neck of inflation and therefore remain extraordinarily tight.

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