SPY, Monthly Bar Chart I am not a chartist, but I do find them to be sometimes useful tools. Tomorrow is the last trading day of the month. Same, weekly bar chart
I think it is important to note that these are monthly and weekly bar charts, respectively. I am suggesting only that over the coming weeks, possibly the next 1-3 months, it is likely this rally continues towards $400 to $411. The faster price goes up, the higher price can go without forcing one to decide if the bear market is over or not. SPY could be down 10 points tomorrow, and still the forecast for higher prices in the coming weeks and months could come to fruition and the 10-point drop do no damage to the expectation I have at the moment for higher prices soon. I do not think either chart should suggest what is likely to happen on any particular day. A monthly bar will be approximately 20 days of trading. A weekly bar will encompass 5 days of trading so long as there is no holiday market closure that week. There are reasons, not chart reasons, to expect that the rally will continue Monday, at least early. First, the week did close, for second week in a row, at its high for the week. In another thread last week @destriero noted last week's high close and that it implied potential for follow through buying. This week, in fact, after the cash close, buying continued. Second, Europe didn't participate in the Friday rally. They are going to want their piece too, most likely. Sunday night and into Monday early I would think higher prices more likely than not. I am not a chartist. I use them as tools, as a sort of, "If this, then, maybe, that."
When the prior day was positive - the odds of the last trading day of October being positive is 67 % over the last 17 years. Those who were negative had a few biggies to the downside. Like the 30th of October 2009. Also preceded by a biggie to the upside like this Friday. Not a prediction at this point. Just facts. I've seen this script repeat a few times this year, though, were people get overly bullish on recent strength and the market reverses hard the next day or week. Seems like there's a ton of economical numbers and decisions coming up this week which could easily spoil the fun for the bulls.
SPY bested the high of the week of 9/9 by a less than 25 cents, and then close below it by more than 25 cents. After the cash close, SPY did rally above that 9/9 weekly high ($389.31). That is the number for the SPY to beat during tomorrow's cash session. The economic release this week that matters is not until Wednesday afternoon, and for some reason, right or wrong, the market seems to be thinking that it is time for the "all important" Fed pivot. $400 - $411 SPY is "only" 10 to 21 more points. Pre-covid, that would be a good couple of quarters or more. But as you know, the way this market trades, one or both of those targets could easily trade between now and Wednesday at 2:00 PM New York time. I don't know, don't care what the Fed does. Full disclosure I am long and I could be short by the end of the day tomorrow if SPY reverses down and trades below Friday's low. Otherwise, I will stay long and see what happens if the SPY does manage to reach higher levels. I don't trade because of what I see on a chart. I do consider what I see on the chart when it comes to managing stops and size and add-ons. My noting of tomorrow being the last trading day of the month was simply to note that tomorrow after the close it will be time to post the updated monthly chart showing the October close. I appreciate your stats.
Follow the banks and brokerages. They are behaving as though a pivot is coming. GS, JPM, BLK especially.
Agreed. Blackrock told clients last week to expect pivot language Wednesday. This just came up in my youtube feed and thought you'd appreciate this one: Jim Cramer on Southpark - YouTube
Sentiment has been overly negative for months. So there is no point in talking about people being "overly bullish" that's something you dreamed up. 2+ weeks ago we had JPM going under $102, "experts" saying the US banks would suffer, and Calhoun saying UVXY was going from $13 to $20. JPM reports their real reality ( they made record money on I believe interest spreads ), JPM now $126, UVXY is at $10, Calhoun and the mediocre media types have nothing to say.
IMHO, the bulls were overly-optimistic on the "pivot rumors" on Friday. This is exactly what happened in August, and it is happening again now, in front of our eyes. The PCE was not as amazing as the headline number would pronounce. Color myself and Powell not impressed. I truly believe Powell is gonna' drop another banhammer with his guidance, because he doesn't give a damn any longer.
What "bulls" are overly optimistic ? Who are these mystery people and quote them ( no, not the eternally optimistic types like that Lee guy ) ? I started muting the Bloomberg morning gang lately they were so overly negative about markets in October. I'm seeing the odd guest and comment now at least hinting it's all overdone. When US markets tanked in the summer what followed was a two month rally. Otherwise known as a 3 day standard dcb in Calhoun's world. Ken was talking about dcb bounces again the last two weeks; I'm not sure when the day counter started. Maybe he explains this to his clients on here he just blocks people and gets real quiet.