Friends
Well, where did this come from? The bulls crossed the 3rd quarter finish line with their tails between their legs, sentiment was atrocious and support levels had been violated. But a little bad news is good news type of action, and we see two of the best trading days for the bulls we have seen in years. The narrative goes that if the economy is visibly slowing then the Fed could at least perhaps pause their rate hiking program. The pause would allow previous rate hikes to be absorbed into the system and thus reducing the likelihood that the Fed will dramatically overshoot and drive the economy into a deep recession. So, in other words maybe a little bad economic news is good for stocks. Odd I know.
As for today, by the close the Dow Jones Industrial Average was up 825 points to finish the day at 30,316. The S&P 500 was up 112 points to close at 3,790. The Nasdaq Composite Index was up 360 points to close at 11,176. Gold was up $32 to trade at $ 1,734 per ounce, while oil was up $2.57 to trade at $86.20 per barrel WTI. Bonds continue to rally (rates moving lower) also this week which is all part of the narrative.
We have been cautious about these moves higher in stocks all year. Rallies have been short-lived, and the bulls have seen their hopes and dreams crushed time after time. So, once again we won’t get ahead of ourselves, but instead just enjoy this 5% move higher in stocks in 2 days.
Have a nice evening everyone.
