We are now back at the levels we were at October 6th with Futures trading at 3776 at the time of writing. After yesterdays action I still wasn't convinced that we are going to continue higher. Take into consideration that we didn't close above Fridays high. The last couple weeks I was saying we were forming a cup and handle pattern. And look. Is it a perfect cup and handle? No. But we are still trading in that area. Now, with this gap up, we could also see the same thing that happened back on September 9th where we closed above the 20 day and 50 day. Then, the next trading day gapped down and continued lower. Or we could sell off today, fill the gap between 3743ish-3707ish and that would solidify more downside to come before the end of the month. With earning season underway, we should expect a lot more volatility as the global economic outlook looks grim the next 9-12 months. I am still leaning towards the bear side the rest of the month, unless we close above the 20 day moving average and that would make me sit back and wait. Be patient, manage risk, trade the market in front of you.
Comment:
I'll be watching the VIX. I was surprised that with the up day we had yesterday, Didn't really get pushed down as much as it should have. Saying, there is still some fear in the market.