If nothing extraordinary happens , i think stocks will raise until Dec 12, the day of the next Fed meeting. Nothing spetacular, indecision about what Fed will do still remains and is the main driver of the market right now. Nov 1 has a scheduled meeting as well, but i don't think Yellen and her crew will really do something just few days before the american elections.
From the technical point view, we have a interesting upward wedge (red trendlines) developing from the 2016 Feb lows. The confluence of top line of this wedge with a purple trendline that touches the 2000, 2008 and 2015 tops, configures a target for me. With this target in mind, if we estimate that Dec 12 is the turning point, the rate of raise would be around 0.1%/d from here, which suits the psychology of indecision we have now. Also we have two interesting facts of momentum indicators on daily timeframe. RSI have a up momentum discrepancy locked in already, which is a bullish sign, and MACD is testing, and so far respecting, a support region that was violated only in situations of sharp fall, which seems to be not the case. A break of this support would be a sign of invalidation of this analysis presented here.
In conclusion, if Fed does raise rates in December i think this will trigger a strong correction. But im less sure of what will happen if they DO NOT raise rates. Maybe we get a better idea as we get closer to December wich is 2 month ahead.
From the technical point view, we have a interesting upward wedge (red trendlines) developing from the 2016 Feb lows. The confluence of top line of this wedge with a purple trendline that touches the 2000, 2008 and 2015 tops, configures a target for me. With this target in mind, if we estimate that Dec 12 is the turning point, the rate of raise would be around 0.1%/d from here, which suits the psychology of indecision we have now. Also we have two interesting facts of momentum indicators on daily timeframe. RSI have a up momentum discrepancy locked in already, which is a bullish sign, and MACD is testing, and so far respecting, a support region that was violated only in situations of sharp fall, which seems to be not the case. A break of this support would be a sign of invalidation of this analysis presented here.
In conclusion, if Fed does raise rates in December i think this will trigger a strong correction. But im less sure of what will happen if they DO NOT raise rates. Maybe we get a better idea as we get closer to December wich is 2 month ahead.