Sei (SEI) To Rally Higher? This Bullish Fractal Signaling Potential Upside Move

Bank of America strategist Hartnett has made a counterintuitive assessment: the most favorable event for the stock market before the end of the year would be for the Federal Reserve to proactively raise interest rates in October—using a tightening move to curb the out-of-control long end. If the Fed proves its willingness to control inflation and term premium through an October rate hike, the market may actually stop worrying about the 10-year yield surging toward 6%, thereby easing pressure on stocks. Currently, while US stocks have not yet been brought down by interest rates, cracks are quietly spreading in South Korean brokers, French government bonds, and CCC-rated credit bonds.

A recent report from Goldman Sachs shows that the Iran war caused oil prices to surge from $3 to $5 per gallon, while the Democratic Party's lead in the general ballot simultaneously expanded from 5 to 9 percentage points—two trends that closely align. Goldman Sachs believes that Hurricane Isaias, once again impacting 63% of offshore capacity in the Gulf of Mexico, has made oil prices a true "ballot decider." Bank of America warns that if the Senate sweeps both chambers, it will trigger significant risk aversion, potentially causing the stock market to plunge by over 10% and weakening the US dollar.

Jefferies warns that about half of the $2.34 trillion backlog orders of the four major U.S. hyperscale cloud providers are owed by loss-making companies OpenAI and Anthropic, creating a credit concentration risk similar to the 2008 subprime crisis. Wood believes that the most likely long-term outcome of the AI narrative is a "large-scale capital destruction" in the U.S., with market share shifting to China's low-cost open-source models, and that it will be the credit market that ends this cycle.

For U.S. stock options traders who have been following dispersion strategies over the long term, the next week or so will be a critical window that determines their annual profit or loss.