Trick or Treat

The coming week is going to be exciting, not because of the Halloween, but because we will have FOMC meeting on Wendneday, an Job report Friday. There are also some interesting earning reports as well.

There are some doubts about last Friday\'s rally and the health of the market heading into the new week. The main questions were about the volumn, and hi/lo list on NASDAQ. Also, SEMI is the laggards again, hitting the low that we have not seen since the end of April. So,what will be the implication of the next week.

The history seems on Bull\'s side on the first part of the week at least

The following is a copy from Kirk\'s report site :

Holding the S&P 500 during the last three days of October through the first three days of November has given a positive return during every year of existence of the S&P 500 tracking fund, SPY. The 12 out of 12 winning trades returned an average of +3.3%, with an average drawdown (i.e. maximum loss) of only -0.7% compared to an average maximum gain of +3.6%. That kind of thing shouldn\'t be ignored. - Jason Geopfert


Since it is an open secret now that FED is going to cut rate, it is reasonable to expect bull are more aggressive than bears, I do not have a lot of historical data on this, but looking back to sepetember 18 reveals that there are small gains made before the FED meeting, and I believe that could be the case this time.

Also, for those frustrated with SEMI not participated in the tech rally, there might be a technical bounce in the store, since the sector is approching oversold.

So, it seems plausible that there are some small gains that could be made on Monday, Tuesday. The real move probably will not materialized until Wensday\' 2:00 P. M. Based on what FED do and say, the tone can be set for the rest of the week , or even rest of the quarter.

So, whether it is a trick or it is a treat, we shall know shortly.