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Updates 12:00 AM EST - Monday 9/27/21
Long term: the bull market that started on 3/23/20 is still intact.
Short term: The bottom for September dip came last Monday. But there is likely to be some retest of key support levels this week.
This coming week
Here's the economic calendar for the full week.
Monday: Durable Goods Orders
Tuesday: Consumer Confidence
Wednesday: Pending Home Sales
Thursday: GDP; Jobless Claims
Friday: Personal Income & Outlays; ISM Manufacturing Index; Construction Spending; Consumer Sentiments
Wall of worry
Market is still worrying about the same issues:
Of the above issues, inflation is the biggest worry. Here's the latest from WSJ:
Fed Officials See ‘Transitory’ Inflation Lasting Quite a While. The outlook from central-bank policy makers is speeding up plans to raise interest rates....With unemployment expected to fall to 3.8% by next year and 3.5% by 2023, the economy will be operating with little or no spare capacity, conditions that typically cause inflation to rise. Fed officials think inflation risks are to the upside; a majority said so Wednesday. Six of 18 Federal Open Market Committee participants think core inflation will be 2.5% or higher next year.
So far $VIX daily chart pattern is not morphing into a scary setup. Volatility has been dropping and is likely to continue. This should provide bullish tailwinds for stocks.
That does not mean $VIX $VX $RVX are likely to just keep dropping straight down. They will make their typical moves: spike up a little; drop down some more; repeat. That is how they coil their ways downward. Bulls should hope that this pattern emerges.
$VIX should not spike up above 21.5 this week in order to maintain the bullish momentum. And volatility needs to start dropping below these key levels:
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