Bond Market Thinks Twice About The U.S. Fed Pivot

11/01/2022

1 minute read

2022.11.01 06:02

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Michael Kramer

Yesterday the gapped lower and traded sideways, finishing down 75 bps. It looked like a pause day that typically follows a big up or down day. We have seen these pause or consolidation days on several occasions in 2022, and a continuation of the previous move can sometimes follow these pause days.

Today is also November 1, which means there will likely be monthly inflows.

S&P 500 Daily Chart

The Intraday chart shows what could be a bull flag/pennant that has formed, which would suggest a move higher from here as well. With the potential for the S&P 500 to rise to around 3950.

S&P 500 1-Hr Chart

Rates

Yesterday Fed Fund futures were thinking again about the potential for the Fed to turn all dovish. The April contract saw its rate rise to 4.95% today, almost back to the 5% it was trading at on October 20.

100-ZQJ2023 Chart

The move higher in the Fed Funds futures also helped to lead the higher, and it appears to have broken free of a bull flag pattern. If this works out, I think we should see the 2-year trading above 4.6% over the next couple of weeks.

US 2 Year Yield Chart

US Dollar

The also moved higher yesterday; for now, I think it can move back to around 112.

Dollar Index Chart

Gold

A few weeks back, I noted that I thought the could fall back to $1,560. After some consolidation, it looks like it is getting closer to that happening, with $1,625 being the support price that needs to break.

Gold Daily Chart

DocuSign

DocuSign(NASDAQ:) almost looks like it is forming a bear flag, which could mean the stock falls. It could result in the stock falling back to around $38, a price not seen since January 2019.

DocuSign Daily Chart