Market Analysis - Monday, Oct. 19

SPX futures may have bounced off the trendline as buy-the-dip investors came back over the weekend, rising to 7725.10. However, the sellers also came back this morning, pushing the futures back down beneath the 52-day Moving Average at 7706.81. The challenge of the trendline near 7635.00 on Friday is telling, suggesting the decline may not be over.  A decline beneath thee trendline at 7660.00 offers a sell signal while remaining beneath the 52=day Moving Average confirms it. The Cycles Model infers that trending (downward) strength may increase as the week progresses.

ZeroHedge reports, “US futures are higher – but well off session highs hit before the European open – as dip buyers storm back into chipmakers after the Nasdaq’s worst week since the April 2025 tariff turmoil…”

NDX futures bounced to 29619.00 over the weekend, but remained beneath the 52-day Moving Average at 29851.17. A sell signal was created on Thursday and remains intact. Despite record Tech selling, the NDX remains above its May 19 low. The uptrend remains unbroken. The uptrend may be considered to be contained above the mid-Cycle support at 27920.00.  Wall Street has decided it’s time to buy.  A healthy buy signal may not appear until there is a total washout with no buyers left.

The premarket VIX declined to 18.26 over the weekend, but rose back above the mid-Cycle support at 18.29 this morning. It remains on a buy signal.  Friday’s panic hedging was the result of a show of trending strength in the VIX. That trending strength may continue to a lesser degree this week. The uptrend in the VIX may not be recognized until it rises above the Cycle Top at 25.18.  The month of November may be particularly volatile.

The US 10-year Bond Yield opened above its Intermediate support at 50.76 this morning.  It is on a buy signal, but investors may decor the additional comfort of a close above the Cycle Top at 51.76.  The Cycles Model suggests consolidation may take place this week. The week of October 26 may inject strength into the uptrend as it may break out to new highs.

The US Dollar may have found support this morning at the neckline of its Head & Shoulders formation at 101.80. Should additional strength arrive, the Cycle Top may be overcome, allowing a reiteration of the buy signal.

The Euro received a brief burst of energy over the weekend, then eased back . It may offer a sell signal upon a decline beneath the Cycle Vottom.  Panic selling may arrive during the week of October 26.

ZeroHedge obsseves, “French government bonds sold off, and the CAC 40 fell Monday after a weekend of nationwide riots and chaos intensified concerns over political instability as the Macron government failed to restore order.”