The popular averages continued to the upside on Monday. Trading volume was light on Columbus Day with no significant macroeconomic reports. Meanwhile the price of crude oil fell while gold rose.
Above is my 3-month chart of the S&P 500 exchange traded fund (SPY). A mid-July rally pushed the price above the 50-day MA before a collapse back to the 200-day MA later in July. During August the price oscillated between those two moving averages until the drop on August 20.
The moderate waffling in the SPY price for several months took an ugly turn to the south amid heavy trading volume in late August. Fear increased in late August and early September in the midst of wild price swings. Recent wiggles have been less pronounced.
Rampant pessimism by pundits, advisers and investors recently turned me optimistic for the longer term. Investors may have been anticipating the usual trough for October, but in recent years many of these seasonal norms have been slowly advancing to earlier in the calendar year. The rebound September 29 and especially the huge intra-day reversal on October 2 restored all of my outlook arrows to green. The move on October 8 back above the 50-day moving average and the continuation on October 9 were reassuring.
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