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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
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Dots

* If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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Winter Cat

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Friday, September 30, 2022

SPX: A Big-Picture Market Perspective...Still Room For More Rate Hikes and Market Weakness

Check out the following two long-range monthly charts of the S&P 500 Index (SPX).

With the current Federal Reserve Interest Rate still only at 3-3.25%, and the SPX still 395% above its 2009 low, it seems to me that there is still a lot of room for more rate hikes to tame inflation, which may bring price down to around 3200 -- its first major support level -- or even lower.

That would blow off the excess parabolic froth that was created in this market from mid-2020 and bring equities more in line with actual economic and global supply-chain conditions.


Until we see the SPX:VIX ratio fall to somewhere around 80.00 or, more likely, 60.00, I don't think we're close to an equity capitulation yet.

So, look for more rate hikes ahead and more SPX weakness...which is in line with my conclusions in my post of September 24.

P.S. The SPX closed the daymonthQ3 and YTD much lower and just a breath above its low of the day, month, Q3, and YTD...at 3585.62.