After trending higher for almost the entire session following a somewhat weak start to the day, another final hour of random whipsaws threatened to erase the market’s intraday gains, but a late spurt of buying just before the close allowed the major indices to close out the day with solid gains.
As we close out one of the most tumultuous months in market history, plenty of folks are eager to put October behind us and kick off what is historically the strongest season for stocks. As we’ve mentioned on several occasions, there have been some encouraging technical developments in the major indices, and, while the number is small, there are a handful of individual stocks that have developed interesting looking set-ups. Now that the broader market has found some underlying support and has so far held on to Tuesday’s huge bounce, we need to see some consolidation and the trading ranges to narrow. While that has happened to a certain extent over the past couple of days, the action between the bells remains way too random, and we’re still seeing some wild swings at the end of the day. That’s going to have to settle down as we move forward.
Meanwhile, this market is still facing some enormous macroeconomic issues, and we have yet to find out if the weak economic data that is surely coming down the pike has been priced in. The Feds have done just about everything imaginable, and now we need to see if their efforts will help restore a more normal credit environment. We’ll see how things go, especially as the indices start to hit some overhead resistance. That said, perhaps the issues and problems we still face will help to keep sentiment contained enough so that we can start to climb that old wall of worry.
Regardless, at least we’ve put October behind us.