Worst Awaits Risk Assets in September

Worst Awaits Risk Assets in September

2022-12-15 • Updated

In 2021, the S&P 500 lost 4.76% in September. What will happen this time?

There is a possibility that this scenario may repeat itself. Investors' fears are not unfounded because September is the worst month for the index. According to the historical dynamics, S&P 500 (US500) has been declining in September by 0.65% over the past 38 years.

1111111111111111111111.jpg

September S&P500 (US500) index performance since 1985.

222222222222222222222222222222222222222.jpg

Average change of the S&P 500 (US500) index during the past 36 years.

The Crypto market usually also has a rough time in September. Bitcoin lost 12.7% in September 2021, 17.4% in 2020, 17.5% in 2018, 21.4% in 2017 and 45.4% in 2015. The main cryptocurrency increased by 13.3% and 3.95% in 2016 and 2019, respectively.

However, the extrapolation of statistical data to the current situation makes little sense if it is not tied to the economic context.

Several factors confirm a possibility of a deeper correction:

  • Weak numbers might relate to the financial year ending in the United States, which starts on October 1 and finishes on September 31.
  • Traders bet on a 75-basis-points rate hike at the Federal Reserve meeting on September 21, which will boost the USD and add pressure on the risk assets.
  • Guru traders sell stocks and invest in T-bills ahead of the deeper correction.

Technical analysis

US dollar index, H4

юс доллар.png

The RSI repeats the same pattern, which has also appeared twice in 5 previous months.

The H4 RSI goes to 84 -> RSI declines, while the price stays at the same level -> Another pump when RSI reaches 70 - 75 -> divergence appears -> deeper correction happens.

The US dollar index is already breaking above a recent high, and currently, the price is aiming at the 111.50 level.

US500, weekly

US500Weekly.png

US500 keeps moving inside an inverted falling wedge. The price has formed a massive range between 3500 and 3650, and it seems like sellers are aiming for it. Moreover, the 200-week moving average, which always acts as the main support for the US500, also stands in this range. If the Fed increases the rate by 75-basis-points, the price will easily decline to this support, where we expect to see the overall market reversal.

 

Do you want to get updates Live? Subscribe to the @FBSAnalytics Telegram Channel, where I post more daily trade ideas!

TRADE NOW

Similar

Nasdaq, S&P 500 Reach Record Highs
Nasdaq, S&P 500 Reach Record Highs

After creating record highs, Wall Street's main indexes opened on Wednesday and began to edge lower, reflecting cautious sentiment among investors. They're eagerly awaiting crucial inflation data that could impact the U.S. Federal Reserve's interest rate decisions. The upcoming release of the personal consumption expenditures (PCE) price index is expected...

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera