The Market Passes its First Test of the October 11-12 Lows

Excerpt from Louis Navellier's Marketmail - 10/23/2018

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On Friday, the Russell 2000 essentially retested its October 12th intraday low on light trading volume. The NASDAQ Composite might also retest its October 12th intraday in the upcoming days, but again, as long as trading volume remains light, we should not worry – as long as there is no panic selling. Although the broader stock market may still try to retest its intraday lows, companies like Netflix, which have already announced better-than-expected third-quarter results, are not expected to retest their recent lows.

The selling pressure from index funds during the first few trading days in October is largely to blame for the recent market chaos. Specifically, the arbitrage folks were selling the Russell 2000 and buying the S&P 500, which temporarily caused small capitalization stocks to falter. However, despite Friday’s retest for the Russell 2000, I want to assure investors that small capitalization stocks can also “melt up” in the upcoming weeks as wave after wave of positive third-quarter earnings and sales results are announced.

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In This Issue of Marketmail (Click Here to Read)

Bryan Perry says the economy and the Fed are sending mixed signals, so the market seems a bit manic-depressive this October, but clarity should emerge after the elections. Gary Alexander agrees that we have to endure the tension of the next two weeks, especially the fear generated by the press coverage of the market’s inevitable down days. Ivan Martchev has some of the brightest news this week, the relatively small spread between junk bonds and Treasuries, indicating a relatively strong economy. Jason Bodner returns from a doom-and-gloom conference in Bermuda with some tonic for what ails the pessimists – a long check list of what’s going right. Then I’ll conclude with a short wrap-up of the economic outlook.

Income Mail:  

Bigtime Mixed Signals Stoke Market Volatility 

     By Bryan Perry

Mr. Market is Not Diggin’ the Fed’s Forward Plan

  

Growth Mail:  

The Press Loves Market Down Days but Ignores Up Days

     By Gary Alexander

GDP, Stocks, or Earnings Could Tip the Election

  

Global Mail:

Junk Bonds Say It’s Too Early to Fret

     By Ivan Martchev

What are Emerging Markets’ Bonds Saying?

 

Sector Spotlight:

The Left and Right Agree – We’re Doomed!

     By Jason Bodner

October Has Been Ugly for All Sectors (Except Two)

 

A Look Ahead:

President Trump “Jawbones” the Fed About Raising Rates

     By Louis Navellier

The Economic News is Mixed – Arguing for Caution in Raising Rates