Brief for SPX:
- It would appear that the quick bounce to ATHs from the September window of weakness has been negated and the market is suffering prolonged weakness.
- Dip buyers have continued to be distributed on with quick rallies that are just as quickly smashed down (Bear market: Big rips, big dips), signaling motives of market participants.
- The dollar has made a surprising (to some) and relentless rally, unnerving the market.
- Yields have made a move, and for the moment, it looks like gravity has flipped south for equities. Should yields continue to rise, debt will become more expensive to service, and the margin fueled growth and stock buybacks will not be able to continue.
- Tapering has begun in Europe, and is expected to begin in November for the US, a taper tantrum may have already begun.
- Poor economic data and macroeconomic correlations may begin to be priced in now.
- We approach peak seasonality for the VIX in October, and weakness for equities, at least until November. OpEx to OpEx trends are common.
- The market has largely been propped up by energy, but it remains to be seen if will continue to rally in the headwinds of seasonality.
- The debt ceiling and government shutdown will likely be the center of the narrative for this month.
GLHF
- DPT
- It would appear that the quick bounce to ATHs from the September window of weakness has been negated and the market is suffering prolonged weakness.
- Dip buyers have continued to be distributed on with quick rallies that are just as quickly smashed down (Bear market: Big rips, big dips), signaling motives of market participants.
- The dollar has made a surprising (to some) and relentless rally, unnerving the market.
- Yields have made a move, and for the moment, it looks like gravity has flipped south for equities. Should yields continue to rise, debt will become more expensive to service, and the margin fueled growth and stock buybacks will not be able to continue.
- Tapering has begun in Europe, and is expected to begin in November for the US, a taper tantrum may have already begun.
- Poor economic data and macroeconomic correlations may begin to be priced in now.
- We approach peak seasonality for the VIX in October, and weakness for equities, at least until November. OpEx to OpEx trends are common.
- The market has largely been propped up by energy, but it remains to be seen if will continue to rally in the headwinds of seasonality.
- The debt ceiling and government shutdown will likely be the center of the narrative for this month.
GLHF
- DPT
Comment:
Watch 4150 for a potential bounce, as it is the 200 DMA and the bottom of this ML channel. It would behoove shorts to cover there and reload higher.
Trade active:
Estimate 4140 or 4062 by Nov 4, with expected cycle lows on Oct 18 and Nov 4. At these points would look to cover short and long for a bounce to potentially reload shorts at 4400-4450. Will watch for development of greater than expected downside and seasonal inversion:
