Good Evening
As is customary on a Sunday evening, I check the E-Mini SP 500 Index futures, which trade electronically on the CME Globex Platform, as this tends to give me a “heads up” as to how Monday trading on the regular stock exchanges (NASDAQ, NYSE, etc) will play out. This also tends to affect my ability to sleep, as I will either be worried and awake, or relaxed and sleeping soundly on Sunday night. As you may know, the E-Mini SP 500 Index futures are a “carbon copy” of the SP 500 Index, and in almost all situations, both will perform almost identically.
With that said, I am happy to report that (as of now) the E-Mini SP 500 futures have penetrated the ever important 1760 psychological level (discussed in a previous post) and have hit 1762. This represents a new All Time High, and hopefully my prior posts about buying strength, not weakness, and new highs, versus new lows, has helped my readers understand my position that when a stock or index makes a new high, that is a good thing. Thus, I am very optimistic that Monday Oct-28 trading will be bullish/positive, and since Mondays tend to “set the tone” for the week, hopefully the rest of the week is positive. See charts below
As an additional, we have four (4) more days left for October trading, which will then conclude the three worst performing trading months of the year, per Jeffrey Hirsh, the author of the Almanac Investor. Most folks know I prefer to make decisions based on data and hard information, versus emotion and crystal balls, and thus I refer to Hirsh’s data which is basically data going back 50+ years regarding the market’s behavior. He has discovered that August, September, and October, tend to be the worst months out of the year for stock performance. In four days, October is over.
One noteworthy event which may move markets this week, is the Oct 29-30 Federal Open Market Committee (FOMC) meeting. A press release/briefing regarding this meeting is expected at 2PM Eastern Time on Oct 30. However no major economic policy decisions are expected at this meeting, and I don’t foresee any earth-shattering news to come out. However, I have been wrong before. The FOMC folks have expressed concern about past “leakage” of statements or at least of their “posture” and phraseology of press releases, as the slightest sneeze has sent markets reeling lately. So I would anticipate a closely guarded meeting and zero news or rumors until the official statement is released.
I conducted another analysis of the C/S/I Funds and I intend to remain in S-Fund for now. C-Fund and I-Fund are also performing well, however October will probably finish out with S-Fund as top performer.
Thanks for reading…
– Bill Pritchard
