The sp500 futures are trading down about 7 and a half points so far tonight and spot gold is down about 12 dollars. Certainly not the end of the world, but I must admit I cannot remember any time during the last 6 weekends on Sunday night when the futures have been down this much. Perhaps they have been but I don’t remember it well enough. It just seems like the futures always trade higher on Sunday night, as if it was a special rule or something.
I would like to add to a VXX long position and maybe start an FAZ position if we start to see a real sign of weakness sometime this week that confirms my recent convictions. There appears to be a small mountain of evidence building up. But it could evolve into a very large mountain if we can get more price confirmation.
The jig is up. The market is extreme overbought and seems overdue for at least some type of more meaningful pull back.
To me, the market going straight up for another 10 trading days to complete the month of October just seems like the market would want to reward ‘pigs’ (especially considering how strong September 2010 was). And how often are pigs rewarded?.
Apple Inc. earnings are Monday after the close. Perhaps perfection is already priced in and it could be a sell the news type of earnings release? Or could it gap up like Google did and take the market higher again. I am guessing now that it could be a sell the news type event and if there is even one very small hint of a problem with their earnings or margins, maybe a huge drop.
To be sure, the last two weeks or 10 trading days of October are going to be very interesting. Just 2 more trading days after that we will have the USA November 2nd elections which can sometimes be a big market moving event depending on the outcome.
I remember reading a fascinating analysis of the US Dollar behavior around presidential election time periods. The authors contention was that a new president could serve as major turning point for the dollar. I forget if the study was also done on USA mid term elections. I wrote a few posts recently about the US dollar possible major pivot last Friday, so it is interesting that this potential pivot is occurring just 11 trading days away from the November 2nd elections.