A Return to Extremes

Weekly Market Update

The market has returned to extreme levels of fear. I said last week we could see a sell off. We got one but it went a little further than I anticipated. No problem. This just gives us another opportunity to load up for a year end rally.

However, I want to exercise patience here as it could be a bit of a choppy week. We have some big tech earnings Microsoft, Meta, Google, and Amazon will be reporting so let’s see how those play out. We also have GDP numbers for the third quarter on Thursday. That will be another factor to watch how the market reacts.

I would not be surprised if we put in the final low this week before a big year end rally. Whether that is a lower low or not, we are back at extreme levels of fear and put buying meaning this correction is likely on its last leg.

From a timing perspective nothing has changed. We have plenty of cycle data to back up our bullish thesis into year end and early next year. If the next bounce is unable to take out the 440 levels on the SPY by mid November that would give us reason to adjust our view. For now, I see this low as a spring that will give the market a shot at 5000 on S&P 500 by late January.