Is This a Market Bounce or Market Comeback?

Hard to say what it is with only experiencing two ‘trading’ days in October, but this bounce, and yes we are calling it a bounce until it can prove to do much more to the upside than it has, is pretty impressive.

The S&P 500 was down close to 8% for the month of September.

These first two trading days for October has seen the S&P 500 regain 5.7%, its best 2-day gain since March of 2020.

Susquehanna’s Chris Murphy  noted that 97% of S&P 500 stocks are up for the third time in the past five trading days. This and the below data shown in a reported article by CNBC.com.

The broader market index, S&P 500, hasn’t seen this type of strength since at least 2000. 

Support for the S&P 500 Established

Make no mistake that the Fed is still committed to raising interest rates in their ongoing efforts to fight off inflation that is still at multi-year highs.

We don’t see an immediate cure all that will end this high inflation environment and the risk of a recession remains.

But, the markets were oversold and call it dollar cost averaging, bargain shopping investing short covering ( or a combination of all three) the markets have bounced.

If and when the markets pause and or slide back, the key support level we see for the S&P 500 is illustrated in Figure 1.

The low price of that pivot area, which looks to be about 357 is what needs to hold in order for us to remain at least optimistic for the markets.

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.

Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:  http://www.tomgentile.com/legal_disclaimers.html.