Carlsquare weekly market letter: Will the pain trade continue?

Read the weekly market letter here:

Carlsquare weekly market letter

• Last week we highlighted a potential pain trade. The outlook was gloomy, but the stock market was trading higher. That turned out to be a correct prediction. The first step was easy from oversold levels – but can we go higher from here?
• The week is macro heavy with the Fed decision today and the US monthly jobs report (NFP) on Friday. Both have the potential to impact the trend
• Although it may not feel like it, the current quarterly earnings season is strong. Perhaps the tech reports can provide an extra boost. After all, 90% of S&P500 tech reports are better than expected! Apple will be a bellwether with its report on Thursday 2 November. From a technical perspective, it has more room to run on the upside than on the downside
• The chart below shows the US Fed Funds rate, i.e. a forecast based on the bond trading.

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