After a wild week to close out October and kick-off November, US equity futures are trading pretty much flat to kick off the week. Even more surprising about the lack of movement in either direction is that overnight we heard a major speech from Chinese President Xi at the China International Import Expo in Shanghai, tomorrow is Election Day, and the Fed meets later this week!
Last week’s rally for equities in the middle of the week sure helped bulls to breathe a sigh of relief, but the market still has some more work to do before bulls can rest easy. As shown in the chart below, the S&P 500’s rally ran out of steam on Friday just shy of the 200-DMA, which is now trending lower for the first time since early 2016. Until the market can break its string of lower lows and lower highs or trade back above its key moving averages, caution is still warranted.
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