The month of October is always a scary month for Wall Street despite being, historically, one of the better months to trade. Well, this October has been no different as we head into Halloween and the last day before we officially close the books and look ahead towards November and the “Christmas Rally”.
The bulls have been cruising and started last week on a 3-week winning streak as they looked to push the major indexes towards their 200-day moving averages. They got off to a great start on Monday as the market danced around this technical level on enthusiasm of Europe getting a debt deal done. The bulls were able to push the market higher by 2%, on average, as the Dow and S&P closed just below their 200-day MA’s while Tech finished above its as the Nasdaq kissed 2,699.
Of course, in took less than 24 hours for Wall Street started to worry that a deal wouldn’t get done by Wednesday’s “deadline” which weighed on the indexes. Tuesday’s drubbing wiped-out all off Monday’s gains and then some which gave the bears hope that there could be a delay by the European Union (EU) to stabilize the financial crisis.
Wednesday was choppy after the EU pushed back the plan to get something done but the bulls got a lift when word spread China was going to buy into Europe’s bailout fund. After testing support, the bulls pushed resistance in the afternoon as the market finished higher by 1%. There was some positive news after the close as well when the market learned the bailout fund could reach $1+ trillion.
Sure enough, Thursday’s futures were pointing towards a huge open after Europe’s 3-step plan to fix the debt crisis was approved late Wednesday night. The market soared 3% on the news as all three moving averages pushed their 200-day MA’s (moving average).
There was a chance for a pullback on Friday considering the big spike but the bulls still pushed the action.
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