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Technical Outlook Still Unclear

While the long-term trend support seems to be in place (around the 200-day moving average), the intermediate-term numbers are all over the place.

This week is an interesting set-up.  The futures over the weekend are indicating a strong positive open for the week.  And over 1000 companies report earnings this week.  This, paired with very little Fed activity, should make for a decent backdrop for the markets.

Looking at the technical data, it’s a tale of two markets.  One market has the SPX running back to over 2825 this week.  The other has the SPX failing down to about 2675.  The volatility range looks like it could be quite high this week.  The bias, fortunately, appears to be positive.

The last several weeks have taken a lot of the wind out of the sales of this market.  While it doesn’t appear a full-blown bear is yet upon us, the BigFoot database has now fallen from the mid-70’s in terms of percent long, to low 50’s.  This is a meaningful shift.

On the one hand, money has been in motion, so some new opportunities should arise.  On the other hand, money has been in motion, and there’s clearly a shakeup.  Tech, in particular, has taken a hard hit in October.

Given that all three macro indicators remain positive, the backdrop for a major decline still hasn’t materialized yet.  Once the elections are over perhaps the markets can get a better idea which direction they’d like to commit.  For now, look for continued volatility, with a positive bias for the week.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.

If You Ignore the News…

If you ignore the news, the technical picture for this market looks strong.  The past several weeks have seen volatility reign in, so the over-bought conditions are a lot less menacing than they were a few weeks back.  As of right now, traders seem content with 2900 has the support for the SPX.

With Canada making some last-minute concessions to save (most of) NAFTA, the markets also seem to be pleased.  Futures are higher.  Don’t look now, but the sideways pattern of the SPX may have just been broken.  If so, 2950 should be on the radar in the next week or so.

For the week, the first level of resistance is 2940 — next level is 2960.  Support continues to hang around the 2900 level.

We’re also at the start of Q4.  Many analysts have been raising expectations since Q1.  This may end up being a tailwind that makes for a pretty decent late-year push.  A 5-to-7% move higher from these levels is not out of the question for the quarter.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.

Get Back to Work

Vacation season is officially in the rear-view mirror.  Almost every school in the country is done with summer and back to the grind.  And the next break in the action won’t really occur until the Thanksgiving Holiday.  Look for volume to start climbing.

Let’s skip the fluff and get right to the chase:  the technicals are still showing bull signals at this time.  The media cycle is all aflutter about trade deals and the woes of the presidency.  Meanwhile, earnings are up, and interest rates are still tame.  This seems to be the only thing market participants care about right now.  Speculating on what out-there news story will take down Trump just hasn’t been profitable.

So what do the technicals tell us?  So far, the 2900 level is the next battle.  While markets closed at new highs, there may be some consolidation between 2870 and 2910 or so while participants settle into this new range.  Otherwise, the markets could shoot up toward the 2940 levels this week.

Over the weekend futures got as high as 2912.50 before pulling back to start this week.  The early indication is that the pull-back is likely to lead to an opening level similar to last Friday’s close.  It looks like the underlying momentum could turn positive though, pushing things higher.  If this market gets a little push, it could climb very quickly.

For the week, look for a positive bias.  It appears one of two likely options are in the set-up:  1) the market does some back-and-forth between 2870 and 2910,  or 2) the market finds its footing early and climbs passed 2925 while hunting for 2940 or so.  If option 2 happens, 2910 should become a new line of support for the week.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.