Tuesday, the markets bounced back from oversold conditions … to start the day anyways…
The major indexes rose as much as 2% in the opening hour.
By the end of the day, sellers got their way, and the markets closed mixed, near flat.
- Dow Jones -0.4%
- Nasdaq +0.2%
- S&P 500 -0.2%
- Russell 2000 +0.4%
Bitcoin^ failed to hold above $20,000. This morning it’s trading under $19,000, down about 8% in the last 24 hours.
It was a mixed bag here too.
4 of the 11 sectors found enough buyers to close in positive territory. At the top…
- Energy (XLE) +1.1%
At the bottom…
- Real Estate (XLRE) -1.3%
- Utilities (XLU) -1.7%
- Consumer Staples (XLP) -1.7%
The rest of the sector ended within 0.5% of their previous close.
While there’s little to celebrate at the moment … A base is forming, and we’ve begun buying.
The market is ready to turn…
As RSI levels reach extreme oversold conditions, you can clearly see a base forming on the daily chart.
The market is begging to turn, and the season of weakness is nearly over.
- The VIX is marching higher, nearing 52-week highs.
- RSI levels remain oversold for all four major indexes.
- The Put-to-Call Ratio returned to oversold conditions.
We believe there is little downside left and have begun buying the dip.
We’ve begun establishing our seasonal position in both S&P 500 and the Nasdaq.
It’s a slow week to close out Q3.
We’re excited about October … Which is a bear killer.
We’re excited about Q4 … Which is the beginning of the political cycle’s “sweet spot.”
Your complete October outlook will be delivered on Friday.