Hello October

It seems like second half of the game is always better than the first half, and forth quarter turns out to be sweeter than the third quarter. That can be said of cowboy's  game in this young football season.  Can it be said to the stock market as well?

Many people should be very glad that the third quarter is behind them, and what a quarter it was !  the DOW reached all time high and then droped 10% and then back again during the quarter. It certainly could be worse, but the matter of fact that the market can fight back all the adversities, it says a lot about the resilence of this market.  Maybe the game has changed, maybe a localized crisis will not cripple a glowing global economy, maybe China can save the world.

It certainly to be pround to be a chinese again these days.  Whenever there is a crisis, there is a talk about china factor.  whenever there is an American firm in trouble, there is a rumor about a chinese buyout.

So, what about the quarter started out by the news that china is ready to throw around 200 Billion to invest (primarily oversee?), and also there are news that American mutual funds open its door to chinese investors.   So, does it mean more money from china will come to US market ?

http://www.marketwatch.com/news/story/china-launches-200-bln-forex/story.aspx?guid=%7B6C8824E6%2D11EF%2D4ED1%2DA5E4%2D63A79BF3DCF1%7D    

And if indeed that chinese money will flow into USA market, who will benefit and who will not?   my bet would be brand names (BA, KO, PRG etc) and maybe financial firms --given their link to china and china previous investment into the blackstone. and chinese firms listed oversees ?  

Historically, the forth quarter has performed better than any other quarters of the year, so, will this year follow the tranditional pattern ?  There are good argument for this scenaries, and I have listed another one that did not mentioned by many news media.

The Friday's trading did not really says a lot about the market, yes, it was down, but it was done in a very orderly fashion.   It does not foretell any weakness of the market.  on the contary, it only confirm the uptrend of the market lately.

Certainly, there are still risk averse among tradings, only the big company get the benefit of doubts laterly, the DOW and QQQQ have almost reached in the overbought zone, but mid cap, small cap lagged.  and I was not impressed by the smh as well.

In my opinion, the market has reached a plateau. and probably will stay here for another week until the earning annucement in earnest.   so, maybe we will see market in autopilot mode, and a relatively a quiet week for the next week.

Hopefully.