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“Behind every successful person lies a pack of haters.” – Marshall Mathers
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Futures were lower this morning heading into the September Retail Sales report, and with the numbers coming in stronger than expected and August’s report revised higher, the tone has become slightly more negative as yields have risen across the board. There’s still a lot more data left to go today with Industrial Production and Capacity Utilization at 9:15 and then Business Inventories and Homebuilder Sentiment at 10 AM. Outside of economic data, shares of Bank of America (BAC) are trading up in the pre-market after reporting earnings earlier.
After multiple days of testing its 200-day moving average (DMA), the S&P 500 staged a nice rally in the early days of October. Just as it traded multiple days testing its 200-DMA from above, though, it has now stalled out just below its 50-DMA. Investors can’t seem to make up their minds over which way to take the market, and it has resulted in a ton of indecision over the last week. And how can you blame them? Scanning the entire investment landscape, there are seemingly plenty of reasons to like the market but just as many to hate it.
Reflecting this uncertainty, over the last five trading days, the S&P 500’s intraday high has stalled out right around 4,380 each day with a highest high of 4,385.85 on 10/10 and a lowest high of 4,377.10. That works out to a range of less than 0.20% and is the tightest such range in years. In fact, the last time the S&P 500’s intraday highs over a five-day span were in such a tight range occurred exactly six years ago in the five trading days that ended on 10/17/17.
The long-term chart of the S&P 500 below shows every time that the S&P 500’s intraday highs over a five-day span were crammed in a range of less than 0.25%. While these types of indecisive periods for the market have been relatively uncommon in recent history (last occurrence was in June 2021), they were much more prevalent in the past. More importantly if you’re a bull is that they were much more common during longer-term uptrends than downtrends. Sure, there’s plenty not to like about the market, but behind every bull market isn’t there always a wall of worry?
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