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Buy The Dip Paying Off as Stocks Extend Streak of Higher Lows

  • Equity markets recovered Wednesday, allowing stocks to erase the bulk of the Tuesday weakness and extend the success of the buy-the-dip strategy as the E-mini S&P printed a fifth consecutive session of higher lows.
  • Firmer equity sentiment was underpinned by hopes for the second round of talks at the Belarus border for Ukrainian and Russian representatives, with reports suggesting a full ceasefire could be up for discussion. The probability of a harmonious outcome, however, remains low - with Russian forces continue to circle Kyiv and Kharkiv.
  • Financials and banks underpinned the rise in headline indices, with a re-pricing of the Fed tightening cycle helping flatter future margins, while still solid oil prices supported energy names, which remain one of the year's best performing sectors.
  • E-Mini S&P futures found resistance yesterday ahead of the 20-day EMA that today intersects at 4398.31. This average represents an important intraday resistance. Recent gains are likely part of a corrective cycle that is allowing a recent oversold condition to unwind.
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