Stock Market To Witness Rallies in Next One to Two Weeks, Predicts Wall Street’s Cantor Fitzgerald – Here’s Why

The financial services giant Cantor Fitzgerald is predicting the stock market will see rallies in the next one to two weeks.

In a new interview on CNBC Television, Eric Johnston, a macro strategist at Cantor Fitzgerald, says that he expects a short-term bounce in the stock market during the next couple of weeks even though he says the equity environment looks “fairly poor.”

“You have an economy that is clearly slowing. Uncertainty is quite high…

But within that view, we think we’re going to get a tactical rally here, probably somewhere in the range of 3% to 5% in the next couple of weeks. We think things line up very well from a technical perspective.”

Johnston uses many technical indicators, such as the Relative Strength Index (RSI) – a momentum indicator used to indicate overbought or oversold levels – to support his stance that a tactical rally is in sight.

“The RSI has gone below 32. We’ve backtested that [and it] backtests very consistent, very strong. The VIX curve (volatility index) has gone inverted. That is showing fear. That is also backtested very well. Seasonality is turning. Systematic funds have likely already sold what they needed to sell.

And hedge funds have also brought down their net exposure. So you add that to the Fed next week, which is where we think they’re going to be dovish. And we think this sets up for a nice rally over the course of the next one to two weeks into month-end.”

Recently, it was reported that the US stock market lost a staggering $5 trillion in value during the last three weeks.

 

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