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Stocks Rally As Rates Plunge

By Michael KramerStock MarketsSep 29, 2022 03:39AM ET
www.investing.com/analysis/stocks-rally-as-rates-plunge-200630427
Stocks Rally As Rates Plunge
By Michael Kramer   |  Sep 29, 2022 03:39AM ET
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Stocks jumped yesterday after the Bank of England noted it would help to stabilize the British bond market. Rates fell dramatically across the curve in the UK, resulting in rates falling in the US. How far rates fall in the US is yet to be seen, as the UK bond buying operation will last only through the middle of October.

It sounds to me like the UK’s bond market was on the verge of spiraling out of control, and the central bank stepped in to stabilize it. How that is good news is beyond me. But after being very oversold, it didn’t take much for the market’s rebound.

But now, the S&P 500 has an RSI, back over 35. Additionally, the index failed again to get over 3,720 and hold on to the gains. So, after all of that, we are nowhere we haven’t been this week. Can the index rally to 3,760? Sure, it would be great to fill that gap at 3,760. At the same time, if we didn’t fill the gap, I wouldn’t be surprised either.

I have no view of the market as of this moment. I need some time to see where it steers me.

SP 500 Index 1-Hr Chart
SP 500 Index 1-Hr Chart

2-Year Treasuries

The 2-year rate fell by 16 bps to 4.13%, following the BOE news, and where the 2-year goes from here will depend on where the market thinks Fed Funds rates are going. Shorting the 2-year has been a very popular trade, and it has traded “special” now for some time in the overnight repo market, which means it is tough to borrow. I wouldn’t be surprised if much of the move-down in rates yesterday was profit-taking.

US 2-Yr Yield Daily Chart
US 2-Yr Yield Daily Chart

Zoom Video

Zoom Video (NASDAQ:ZM) rallied for a second day and continues to act as an excellent leading indicator for the market. But resistance is overhead at $76.45, so at least at the moment, the rally may be closer to its end than the beginning.

Zoom Daily Chart
Zoom Daily Chart

Amazon

Amazon (NASDAQ:AMZN) rallied by around 3% yesterday, but I’m not sure that the pattern in Amazon is all that bullish. It almost looks like a bear flag. But we will see what happens to it today.

Amazon 1-Hr Chart
Amazon 1-Hr Chart

Alphabet

Alphabet (NASDAQ:GOOGL) has fallen out of its bear flag, filling the gap at $97.20. But the decline in the stock to this point doesn’t seem like enough to account for the size of the pole portion. Even from a conservative standpoint, a drop to $83 seems possible.

Google Daily Chart
Google Daily Chart

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Stocks Rally As Rates Plunge
 

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Stocks Rally As Rates Plunge

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Comments (5)
Jeff Stuart
Jeff Stuart Sep 29, 2022 9:04AM ET
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how did this guy get this job?
Chris Fran
Chris Fran Sep 29, 2022 9:04AM ET
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he's spot on the s&p500 moves thus far. what's your analysis?
Mario tragik
Mario tragik Sep 29, 2022 9:04AM ET
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spot on? lol sure he was spot on on 2019 - 2021 these blind followers are so funny
Vikrant Hardikar
Vikrant Hardikar Sep 29, 2022 8:52AM ET
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USA third class market
Mario tragik
Mario tragik Sep 29, 2022 7:43AM ET
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lol omg Kramer just stop 🤣
David Bud
David Bud Sep 29, 2022 7:43AM ET
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You just never learn. Sad!
Logan CALDER
Logan CALDER Sep 29, 2022 7:43AM ET
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Mario....I have been following along for quite some time. At this point it is hard to believe you sill post. You have repeatedly been so wrong it is comical. No analyst is going to be all knowing, but at some point you should have enough character to admit he has been very well on target for several months.
David Bud
David Bud Sep 29, 2022 7:43AM ET
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Imagine how pathetic of a troll you have to be to choose to do it on an Investing.com comment section everyday of a guy blogging who actually is correct in his analysis. Go back to your WallStreetBets forum with the rest of the apes who are getting wiped.
Mario tragik
Mario tragik Sep 29, 2022 7:43AM ET
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sure we'll see tomorrow star the beginning of a green month.
Steve Pate
Steve Pate Sep 29, 2022 7:28AM ET
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Can you please explain why ZM is a leading indicator. thanks
Chris Fran
Chris Fran Sep 29, 2022 7:28AM ET
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what's the 2nd word in the title? and did zm achieve it?
Stan Flation
Stan Flation Sep 29, 2022 3:50AM ET
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Happy to read your insghtful articles!!! YTD CNY, GBP, EUR, etc. historical stumbles, while bonds, in general, falling. It seems like a combat between the market and the central banks, or better, between the MECHANICAL BULL and the ANGRY BEAR.
 
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