Stock Market Today: October 29th - November 2nd, 2018

Awe crud, I just realized that I completely forgot to cross-post a chat post that I made on our Discord live chat over the weekend.

Thought it was worthy enough to share in here as well.

I'll just copy paste my whole post rather than compiling the whole thing from scratch again. Better late than never I suppose.

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I am thinking a lot of the recent market volatility we have seen this month is perhaps the markets pricing in an unfavorable outcome for the upcoming midterm election. My thinking is that once we're through with all of that "noise" so-to-speak, regardless of whichever party comes out on top, we will see this markets settling down. If history is any guide to what we could see in the final 2 months of this trading year, then it could be a nice finish for the equity markets.

Here is Stock Trader's Almanac S&P 500 seasonal patterns chart dating back to 1950-



It is interesting to me that in each instance, whether that be "All Years" or "All Midterm Years" there is a nice year end rally (aka, Santa Claus Rally). We'll have to see if this were to materialize once again this year as well.

Additionally, the month of November kicks off the “Best Six Months” for the Dow and S&P 500. Small caps also do well in November, but doesn't really start to take off until the last two weeks of the year. It is worth noting that November is historically the 2nd best month of the year for the Dow and S&P 500 in midterm years (since 1950).



We'll have to see if this Oct. correction up to this point will lead to further declines (or even dare I say a bear market) but my gut feeling is that it will not.

The month of October has notoriously been known for major market moves and stock market corrections over the years.

After coming off a stretch where the market (S&P 500) did not make a +/-1% daily closing move for 75 consecutive trading days (one of the longest streaks ever in history) one could argue that we were very due for this volatility.

Let's see how these next couple of weeks will play out. I suspect that we maybe have a little more to go here with the market volatility, then we'll see the markets settling down going into year end.

Here is my current U.S. indices pullback/correction table on Google Sheets as of this Friday's closing prices-



It is worth noting that the S&P 500 did actually briefly dip into "correction" territory intraday on Friday. I suppose we would need to see the Dow also joining in the party before we are to set some kind of bottom in. Just my 2c here. We shall see.

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DJ30 has now finally joined in on the "correction" party with today's late day purge

 

smelling a little panic in the air here (albeit i'd still call this an "orderly" selloff for now).

small cap index inching closer to "bear" territory here

 

^^ this 100% agreed

 

haha yeah no doubt, these daily moves are getting pretty funny of late

throwback to late 2008 i guess ... definitely has that feel to it just a little, but not quite as violent (at least not yet )

looks like the NASDAQ is on pace for its worst month since post-Lehman (Oct. 2008)

 

Good morning to all.

Here is this morning's pre-market stock movers & news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead today.