Market Review October 10 2023
There’s one interesting market signal (80% Up day ) on Tuesday after market close, therefore I have decided to pen down my thought on it.
S&P 500
S&P 500 has rallied further, and recapture 20 day MA. If it close above 50 Day 100 day MA and the breakaway gap, would serve as further evidence of start of Q4 bullish rally ( or maybe it has started and is in the midst of substantial upswing ) . Overnight this rally attempt on Monday and Tuesday was seemingly attributed to the dovish Fedspeak , softening of 10 year yield. Interestingly, 10 year yield could potentially develop into Island reversal pattern , if it breakdown further. As the Renowned ex-institutional analyst Walter Deemer mentioned, “Parabolic Advances usually carry further than you think, but they do not correct by going sideways.” So elevator up in yield also suggest elevator down in yield, therefore we could potentially be looking at a reversal in 10 year yield in the days/weeks ahead.
Nasdaq 100
NDX also has rally further, it has rally and close above 50 day MA, and is getting closer to Flag top.
I would like to point out presence of one encouraging market internals by Tuesday market close (Oct 10 2023 ),
80% UP day
We have the presence of first 80% Up volume day in NYSE by the end of October 10th. Heavy buying after heavy selling in end September ( cluster of 80% down volume day in end Sept ), suggest the worst could be behind us and institutions are re-risking substantially. If we have another 80% Up Volume day in NYSE by the end of October 11th, then this Bullish signal is called back to back 80% Up Volume day, suggesting a broadening of market breadth, all the laggards ( financials, transportation, industrials ..etc) will catch up with the leading tech sector ( Technology, and semiconductors ). Just to be clear, the presence of 80% UP volume days, or back to back 80% Up day ( if it materialize by Oct 11th ) does not mean that the indices will go straight back up, there could be backing & filling or testing of previous support before going up further.
The next catalyst for market move, could be CPI release on Thursday ( October 12th ). And who knows, maybe market has been moving up on Monday, Tuesday and possibly today in anticipation of further softening of CPI number ? or maybe market could retrace and retest support deeper down if CPI disappoint ? The only way we can navigate safely is to take it day by day, objectively assess price chart & market signals in each and every coming days.
In the next articles, I will do a deeper dive into bond market.
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