Special post - market review
Part 1: In the past month, we have witnessed an atmosphere of uncertainty and instability in the market, despite sharp gains in the indices, which have spent most of the time at all-time highs.
Here are the index performances from the beginning of October to today: S&P 10%, Nasdaq 14%, Dow Jones 7%, Russell 8%.
Let's touch on a few points influencing the market's direction: 1. On December 3, US government funding will expire. If Congress fails to approve a continuing budget, the government will shut down and widespread cuts will begin.
The last times the government shut down (January and December 2018), indices fell over 10% within a few days.
2. The US President announced that by Thanksgiving (11/25) he will decide whether Jerome Powell will continue as Fed chair, or if he will be replaced by Lael Brainard, a member of the Board of Governors and a staunch Democrat.
The Fed chair has an enormous influence on the market (decisions such as interest rates and economic aid).
3. World governments are seriously discussing the energy crisis, and the US administration is even considering utilizing the Strategic Petroleum Reserve to lower prices as they continue to soar.
4. Tom Lee (Fundstrat), one of the most prominent and bullish analysts in the US, noted that in his opinion, a correction of about 5% in the indices is possible in the coming days before the continuation of the "year-end rally".
Continuation and technical analysis in the next post: