Hello Everyone, I hope you had a nice weekend, here's my extensive weekend newsletter posted both as a Youtube video and standard webpage newsletter format

Youtube Video of  the Weekend  Newsletter October 8th, 2023     - watch in full 1080 resolution on tablet or desktop NOT your phone

PLEASE leave a like and comment, helps the Youtube Algorithm to get out stuff more visible - I appreciate the support!

Weekend Newsletter Oct 8th, 2023 standard Webpage Format     - contains all the dynamic chart links

Market Comments: Last spring we made a predication that the market would likely hold up and rally throughout the summer into late July, then experience a correction in Aug/Sep (per seasonality) and that's exactly what has unfolded with a strong correction in the SPX so far in a 3 wave pattern Aug/Sept, and even into the first part of October. As a trade low finally put in last week? Perhaps, as I can count 5 waves down on the SPX, however until the SPX can take out the last lower high at 4333 for a break in structure, this could still be a 4th wave bounce that once over needs another move down in a 5th wave (remember the SPX didn't tag its 200 day MA, it got close, is that close enough for governments work or does that still need to be tested)? 

Geopolitical Risk: Unless you live under a rock by now you are well aware of the very unfortunate and serious situation in Israel that unfolded on Saturday morning. Over the last 20 years there would be a conflict every couple years with rockets fired from Palestine and Israel responding then backing off etc. However, the seriousness of the situation this time dwarfs those minor events and could be a 911 event for Israel forcing them to go all out. Markets do not like uncertainly and this is a 'wild card' for the market unfortunately. I don't see an easy solution here.
The 30 min SPX cash chart I show in the SPX section shows the this. Weekend betting futures over in Europe are pointing to a possible -0.6% gap down with our US futures market, we'll see....

Earnings season starts in about a week and that will take center stage. Typically the market holds up during earnings season (because of the game where companies reduce earnings estimates enough that they almost always then beat those estimates during actual earnings season LOL. The fact that earnings season is approaching helps to support evidence at a trade low for the market (but there's also time for another quick dump before earnings begins. It will be interesting to see if we start to see weakness from consumer demand on earnings. 

Big Cap tech stocks have held up well, and these have skewed the markets because of their strong weightings to the indexes. The average stock underneath the surface is FAR weaker than what the indexes show because of the weighting effect. Where Big Cap tech goes so will the markets.

Rates/Bonds : The moves in the bonds market has obviously been a big deal, as well as the strength in the US Dollar. The 10-year hit a new intra day high on Friday of 4.9% before pulling back. TLT 20-year bonds also finally tagged that long term support I've had as a target zone for months! What the market also needs is some sort of top in the 10-year and bottom in TLT. Realize, however for the long term, bonds are in a secular bear market, and rates are in a secular bull market; this could last for 10 or 20 years. We are not going to see interest rates at zero percent again for decades perhaps. 

Long-Term : What Steve and I most worry about is the sheer amount of debt for the US, and for the rest of the world. Eventually there's going to be a great reset, there as to be, there's no way all the debt can ever be paid back. I'm not sure how that would unfold, but maybe it will be like a Bretton Woods 3 where all the world governments get together and cancel debt or start some new world currency, who knows, but eventually that is probably inevitable; again that has nothing to do with trading and the markets now, I'm simply taking bigger picture down the road.

Mean reversion systems : While the KISS Trend Following systems for the indexes (except for the SPX), we still have some open mean reversion systems longs on SPY and MES futures. The rally last Friday resulted in some of these systems closing out (and for nice profits): CCI divergence and Bull Exhaustion closed out for SPY, and for MES RSI Oversold, and Bull Exhaustion closed out. We still have open system trades on SPY for QE BTS and RSI oversold, and for MES we have CCI divergence, QE BTS, and Trend/Pullback still in open positions.

Key Events for This Week:

1. Geopolitical conflict over in Israel may spook the markets some
2. Bond market is closed on Monday - may help the markets some
3. Wednesday: PPI, Core PPI, FOMC minute's
3. Thursday: CPI, Core CPI, Initial Jobless Claims, Crude Inventories, Natural Gas Inventories
4. Friday: Exports, Imports, Univ of Michigan Sentiment

Matt