Expecting temporary bottom & push back to new highs on Tech strength Array ( [cookie] => 9be296-8a8372-0cd7d1-4197ce-46a76d [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_macro [visitor_id] => 583461 [reason] => [method] => ) 1
Equity trends remain bullish but fragile as we reach the end of October. Stocks, Treasury yields, and the US Dollar look to all be close to beginning a corrective pullback, which likely starts in early November but should arguably prove short-lived and not the start of a larger decline. Minor pullback attempts this week have failed to do much damage but should ultimately result in 5-7% declines in US Equities for the month of November, in my view. While the intermediate-term bullish thesis remains very much intact, it’s doubtful that US Equities will continue to push up into and post-election without any consolidation. Risk/reward seems poor in the short run, and SPX seems unlikely to exceed 6000 right away but could find initial resistance near 5900-5935. Meanwhile, QQQ should arguably find resistance at 503-505.
While I do harbor concerns about the next 4-6 weeks, Thursday’s decline failed to make sufficient damage to claim that a larger selloff has begun, and prices on both NDX and SPX look to be near support, which likely could carry indices higher into US Election before any November damage.
A few relevant points:
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