Carlsquare weekly market letter: Big Evening Star in S&P 500

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Carlsquare Weekly market letter

• March-April is usually a strong period for the equity market, and 2023 is also the third year of the US presidential cycle, which usually gives a strong year. But the Fed is still hawkish, reducing liquidity and talking about even higher interest rates. This works against the seasonality of the stock market. Who will win?
• There is a big Evening Star pattern in S&P 500 after Jerome Powell’s speech yesterday, probing for further downside
• All eyes are on Friday’s inflation and employment data from the United States. The US dollar and the high-yield bond market are still the best indicators
• The chart below is from McClellan and shows the US presidential cycle. The third year of the presidential cycle is usually strong for the equity markets.

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