The Bank of England market-rescue rally was short-lived. On Thursday, Wednesday’s gains were erased, and then some.
The S&P 500 closed at a new low for the year … as all four indexes posted sharp declines.
- Dow Jones -1.5%
- Nasdaq -2.8%
- S&P 500 -2.1%
- Russell 2000 -2.4%
Of the 11 sectors, 10 closed in the red. The top performer…
- Energy (XLE) ended unchanged, +/- 0.0%
At the bottom…
- Consumer Discretionary (XLY) -3.5%
- Utilities (XLU) -4.0%
Running Up That Hill
Dow Jones component Nike (NKE) lost 3.4% during yesterday’s trading session and another 10% after hours.
- The athletic apparel company beat earning expectations
- But slowing sales, high inventory, and supply chain issues weighed heavy on the stock
- Nike has given about $20 billion in market cap over the last 24 hours.
Markets are pointing higher.
As the chart shows, the S&P 500 has been reacting as expected to overbought and oversold RSI conditions this year.
And this morning, the S&P 500 is at a critical support level too.
All our other signals agree. The market is at a technical turning point.
- The VIX is at resistance.
- RSI levels are oversold for the major 3 indexes, the Russell 2000 is neutral
- The Put-to-Call Ratio remains oversold
October is a month of fear that needs to be unmasked.
When investors think of October, the crash of 1929 & 1987 may come to mind.
- Major declines during October also occurred in 1978, 1979, 1989, & 1997
- The worst signal day for the Dow was in October 2008, with a decline of 18%
But when you peel back the curtain a bit further, you’ll find October is a reliable bear killer.
- Since WWII, 12 bear markets have met their fate in October
- 66% of those were in mid-term years.
1946, 1957, 1960,
1962, 1966, 1974,
1987, 1990, 1998,
2001, 2002, 2011
October, statistically speaking, is the…
- Best Dow Month
- Best S&P 500 month
- 2nd best Nasdaq month
This October marks the beginning of the “sweet spot” in the 4-year election cycle.
We are at the blue arrow. And we have been buying.
Here are the important dates to note in the month ahead:
- 10/12 FOMC meeting minutes released
- 10/13 CPI inflation data
- 10/14 Earnings season’s unofficial kick-off. Big banks MS, WFC, JPM, C report.
- 10/21 Options Expiration
- 10/27 Q3 GDP
- 10/28 Univ of Mich consumer sentiment
*BEAT on watch
HROW support at $10
SAVA resistance at $50, support at $40
EVTL support at $9
DCPH support at $17
RVNC support at $24
FREY support at $14
HLIT support at $12
CANO support at $8, resistance at $9