Kicker on the S&P?

SPCFD:SPX   S&P 500 Index
Recent weeks have seen hot and cold action in the S&P 500: Big up candles (October 5, 12) followed by painful hemorrhaging lower (October 13, 14 and 19).

Let’s review some key things that have happened.

First, we need to focus on 3425. This level was resistance in Labor Day week and remained a painful barrier for the next month – especially on October 6 when doubts about fiscal stimulus increased.

The good news for the bulls is that 3425 was almost exactly the close on Monday. Old resistance seems to be new support.

Second, October 19’s decline produced a big red candle. Tuesday’s and Wednesday’s bounces above could be the start of a “kicker” pattern. That’s when the bears score an initial victory, only to get defeated later by the bulls.

Monday’s selloff was also the biggest percentage drop since September 23. (That candle was followed by a kicker of its own -- and 10 percent rally.)

Finally, current price action is interesting because the Nasdaq and growth stocks are coming back to life as earnings hit. This is potentially bullish because it shows that investors returning to favored leadership areas.

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This is just noise. The (sad) fact is, the whole market is dependent on what happens with the stimulus. And based on what I've been reading today, it is not going to come until after the election. So I think the bulls warrant caution.
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