Set for a rally or yet another dead cat bounce?
Reporting season in the US is peaking. By the end of last week, about 20 per cent of S&P companies had submitted their Q3 reports. So far, S&P500 companies have beaten earnings expectations by, on average, 2.3%.
This week we have several heavy weights. Among those is Alphabet realizing its quarterly report today, followed by Microsoft tomorrow, and Apple and Amazon on Thursday, 27 October. Ahead of this, the S&P 500 index has bounced off its lows. Will the Q3 2022 reports support further gains?
S&P 500 (in USD), daily one-year price chart
S&P 500 (in USD), weekly five-year share price chart
On the other hand, looking at the macro picture, inflation expectations are still on the rise, as shown in the chart below. Thus, the potential reporting season rally can be yet another dead cat bounce.
ProShares Inflation Expectations ETF (in USD), daily one-year price chart
The full name for abbreviations used in the previous text:
EMA 9: 9-day exponential moving average
Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.
MA20: 20-day moving average
MA50: 50-day moving average
MA100: 100-day moving average
MA200: 200-day moving average
MACD: Moving average convergence divergence
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