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The video in this report is only accessible to members

US Equity markets are likely in a bottoming process, and I feel that time-wise, lows could likely be in place sometime this week.  One can’t rule out a retest of lows which would bring about a mild undercut, and drive SPX likely to 4200-4225.  However, this would mark an excellent risk/reward opportunity for an October rally.  Importantly, Treasury yields and US Dollar might show a more impressive retreat as an Equity rally gets underway.  Bottom line, pullbacks into October coinciding with bearish sentiment likely present opportunity.

Despite the minor pullback on Monday to kick off the first full week of Q4, it remains a “Tale of Two Markets”.  Technology continues to show above-average relative strength.  Meanwhile many defensive sectors continue to show weakness.

Indeed, this weakness is not limited to defensive sectors like Utilities or REITS, but has engulfed most of the stocks which are tied to the consumer.  Both Staples and Discretionary have shown some outsized absolute and relative losses of late.  However, Small-caps along with Regional Banks, and Transportation issues also suffered underperformance on Monday.

Moreover, assets that are interest-rate sensi...

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