US stocks are seasonally bearish from late August until mid-October. Seasonal cycles are not precise so it possible there could be more downside action in the coming weeks. However, the bears are struggling. On September 24th, the three main US stock indices made a correction low, followed by a rally that retraced most of the drop. There was a short-term peak on October 12th and the subsequent decline has so far been shallow.
One of my best indicators hints another important bottom could be made on October 21st.
Please see the 30- minute S&P 500 E-Mini December 2020 futures chart courtesy of Trading View.
The Market Profile indicator illustrates trading volume related to price level, the largest volume cluster represents value which a market will either travel towards or away from. There are two areas of interest near where the S&P 500 closed today. The first value area was made on October 19th ; however, this level did not hold the decline that day.
The next most current value area was made on October 6th . There was a sell off late in the October 20th trade session. If there’s additional selling on October 21st price could bottom in the value area. The S&P E-Mini futures price of 3394 equates to about 3403 on the S&P 500.
It’s possible an important stock market bottom could be made on October 21, 2020.
The stock market bears are running out of time.