Bulls Avoid October Crash
The stock market closed the week and month on a high note Friday with the bulls getting the weekly and monthly win. The action was choppy with volatility remaining elevated as high profile earnings trumped the current government shutdown.
The Nasdaq traded up to 23,946 before settling at 23,724 (+0.6%). Resistance at 23,750 was topped but held. Support is at 23,500.
The S&P 500 ended at 6,840 (+0.3%) with the peak at 6,874. Resistance at at 6,900 held. Support is at 6,800.
The Dow tagged a high of 47,718 while closing at 47,562 (+0.1%). Resistance at 48,000 held. Support is at 47,500.
Earnings and Economic News
Before the open: Berkshire Hathaway (BRK), BioCryst Pharmaceuticals (BCRX), Cipher Mining (CIFR)
After the close: Palantir Technologies (PLTR), Hims & Hers (HIMS), Goodyear Tire & Rubber (GT), Clorox (CLX)
Economic News
None (government shutdown)
Technical Outlook and Market Thoughts
For the week, the Nasdaq was up 2.2% and the S&P added 0.7%. The Dow gained 0.8% while the Russell was down nearly 2%. Year-to-date, the Nasdaq has soared 22.9% and the S&P has jumped 16.3%. The Dow is higher by 11.8% and the Russell has rallied 11%, for 2025.
The market avoided an October crash as the major indexes ended the month near record highs. Corporate earnings have been above expectations (surprise) and money is still flowing into the market as the Nasdaq and the S&P have been higher the past three Friday’s and two Monday’s.
The melt up higher comes despite a more hawkish Fed, which cut rates, but warned Wall Street it shouldn’t bank on a rate cut in December. Meanwhile, the highly anticipated meeting between Trump and Xi went as well as could be expected, easing trade tensions between the U.S. and China.
The technical outlook remains bullish over the near-term but the action in the small-caps and heightened volatility could be sending warning signals.
The Russell 2000 peaked last Monday at 2,539 and made lower lows into Friday’s close. Our February 23rd, 2024 at 2,500 was cleared and held with the all-time high from October 15th at 2,541 also holding this level. The problem is there hasn’t been back-to-back closes above 2,525 to keep 2,600-2,650 in play.
Shaky and key support at 2,475 was tripped but held on Friday’s fade to 2,455. Closes below 2,450 and out of the uptrend channel reopens downside pressure toward 2,425-2,400.
The Nasdaq traded in a 526-point range after Monday’s gap higher with Friday’s peak hitting 23,946. Key resistance at 24,000 held. A close above this level and the recent all-time high at 24,019 will likely get a push towards 24,500-25,000 in focus.
Key support is at 23,500 followed by 23,000. Closes below the latter would indicate further weakness down to 22,500 and the 50-day moving average.
The S&P 500 hit a high of 6,874 with new resistance at 6,850 holding. Our revised price target from October 3rd remains at 7,000 for the index on continued closes above 6,850.
Support is at 6,800-6,750 with the latter also representing the bottom of the uptrend channel. There is stretch down to 6,700-6,650 and the 50-day moving average if 6,750 fails.
The Dow spent the first half of last week battling fresh all-time highs north of resistance at 48,000 while peaking at 48,040. Closes above this level, and more importantly 48,500, would get chatter about 50,000 circulating. This remains our Price Target from February 23rd, 2024 for the blue-chips.
Support is at 47,250-47,000. A drop below below 46,500-46,250 and the 50-day moving average would signal another trend break out of the uptrend channel.
The Volatility Index (VIX) has tested key resistance at 17.50 over the past three sessions with Friday’s top at 18.54. Closes above this level would likely get 20-24 and the 200-day moving average back in the mix.
Support is at 17-16.50 and the 50-day moving average. Last week’s low tapped 15.62 with closes back below 15.50-15 suggesting an ongoing bullish market.
The 70 level for the relative strength indexes (RSI) held on both the S&P and the Nasdaq last week with the latter getting stretched. Current RSI for both is in the low 60’s, along with the Dow’s RSI, as well. The Russell’s RSI held 50 on Thursday and a reading that is considered neutral.
The current action is feeling like our upper end price targets for the major indexes, and nice round numbers, could be in play this month. However, once a few levels of support are cracked, it will be interesting to see if another round dip buying occurs. If not, elevator drops to lower lows could come into play.
Momentum Options Alerts Update
Closed Momentum Options Trades for 2025: 47-14 (77%, 16 triple-digit winners) / 2024: 77-17 (82%, 38 triple-digit winners). Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Stops” entered to close any alerts or “Limit Orders” in your brokerage account unless we list one. We will send out an “Alert” or “New Alert” if we want you to close a position or if a new position comes out. Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with Text Alerts and videos throughout the week.
Rivian Automotive (RIVN, $13.57, up $0.58)
Option: RIVN December 15 calls
Expiration Date: December 19th
Entry Option Price: 75 cents (10/27/2025)
Current Option Price: $0.90
Exit Target: $1.50
Return: 20%
Stop Target: None
Action: Lower resistance at $13.50-$13.75 was reclaimed following the intraday trip to $13.59. Closes above the latter and the 50-day moving average would be bullish for a run towards $15-$16. Support is at $13-$12.75.
Earnings are due out on Tuesday, and although Wall Street is expecting a loss, we are looking for less-than-expected with a revenue beat. There is
Lyft (LYFT, $20.46, up $0.71)
Option: LYFT November 25 calls
Expiration Date: November 21st
Entry Option Price: $0.70 (10/14/2025)
Current Option Price: $0.50
Exit Target: $1.40
Return: -29%
Stop Target: None
Action: Key resistance at $20.50 was cleared but held on the rebound to $20.64. A close above $21.25 would be bullish for a run up to $23.50. Support is at $19.75-$19.50 and the 50-day moving average.
Teva Pharmaceutical Industries (TEVA, $20.48, up $0.45)
Option: TEVA December 24 calls
Expiration Date: December 19th
Entry Option Price: $0.40 (10/14/2025)
Current Option Price: $0.30
Exit Target: $0.80
Return: -25%
Stop Target: None
Action: Key resistance at $20.75 was challenged but held with the high at $20.60. Closes above this level could lead to a quick run to $22-$22.50. Support is at $19.75-$19.50.
Hertz Global Holdings (HTZ, $5.13, up $0.14)
Option: HTZ November 9 calls
Expiration Date: November 21st
Entry Option Price: $0.65 (9/25/2025)
Current Option Price: $0.20
Exit Target: $1.30
Return: -69%
Stop Target: None
Action: Lower resistance at $5.25-$5.50 held with the high at $5.14. Support is at $4.75-$4.50.
We mentioned we like the deal with Amazon and believe there could be a massive short-squeeze forthcoming. Earnings are due out this week.
The technical setup is also improving with the 50-day moving average leveling out.
