CHINA stimulatory blitz vs early OCTOBER bearishness

FUNDSTRAT:

What China Stimulus Means for U.S. Investors
The S&P 500 closed at all-time highs three out of five days last week, as the impact of the Federal Reserves September 18 rate-cut decision spread to China. The Chinese government, along with the Peoples Bank of China (PBOC), took what Fundstrat Head of Research Tom Lee described as drastic positive action. This included, among other things, an CNY 800 billion (USD $114 billion) lending facility to help fund stock buybacks and institutional stock purchases; mortgage-rate cuts; and a cut in the reserve requirement ratio.

This stimulatory blitz helped buoy stock indices around the world not just in the U.S. Unsurprisingly, Chinese stocks had a banner week, with the CSI 300 index up 15.7%, its best weekly gain since 2008. Hong Kongs Hang Seng index rose 13% this week. In the wake of Beijings stimulus measures, the regional bet on China might make sense for those who remain hesitant about investing in U.S. due to the uncertainty around the coming Presidential election, Lee suggested. Among the industries the Fundstrat team has found to be positively correlated to China are those in the Commodities, Industrials, and Consumer sectors.

Head of Technical Strategy Mark Newton has similar constructivism on China. Weve seen a lot of false starts in Chinese stocks in the past, Newton noted, including a failed rally attempt this spring. In contrast, Chinas surge this week has huge technical importance when you look at a larger area. We saw a pretty major breakout on an intermediate-term basis that makes the prospects of a rally a little bit more likely, in my view.

Regarding U.S. markets, Newton said, we have managed to yet again climb back above all these prior highs in the last few days. To me, that signals that markets can push ever higher. A lot of that gels with some of the cycle-based forecasts that say that markets probably rise into mid-October.

For U.S. investors, Lee and Newton both urge caution in the immediate runup to the election on November 5. Yet despite election-related uncertainty from a still-tight race, Lee remains constructive when looking out until the end of the year. He reminds us that the S&P 500 is on track to close up for the month of September despite having fallen 4% in the first week of the month. To me, that is a sign of a strong market, he said, particularly when considering that if September does turn out to be positive for stocks, that would mean that the S&P 500 has been up for eight of nine months so far in 2024.

"market breadth signal with a perfect record just triggered
Key points:

The NYSE McClellan Summation Index cycled from below 100 to above 1000
Similar improvements in market breadth resulted in a 96% win rate over the following year
Signals within 2% of a high have never experienced a loss over the next two, six, and twelve months

https://mailchi.mp/2...ed?e=b27dc45da1

"Could U.S. Stocks Crash In October?

https://stockcharts...._eid=8d085491f3

Es long 5788.5
Net long 1 each es, nq

Flat hsi, a50 as China goes on long holiday week.

Nq long 20129.5
2 nq, 1 es long
Hedging, last day of Sep, want to end this month with a green or slightly red day.

Es long 5788.5
Net long 1 each es, nq

Flat hsi, a50 as China goes on long holiday week.

Very busy data week..... also MIDEAST situation..

Jesse Cohen (@JesseCohenInv) posted at 10:16 AM on Sun, Sep 29, 2024:
Key Events This Week:

1. Fed Chair Powell Speech - Monday

2. ISM Manufacturing PMI - Tuesday

3. JOLTS Job Openings - Tuesday

4. Nike $NKE Earnings - Tuesday

5. ADP Payrolls - Wednesday

6. Tesla $TSLA Q3 Deliveries - Wednesday

7. Jobless Claims - Thursday

8. ISM https://t.co/0oUgOgrWjk
(https://x.com/JesseC...0353468757?s=03)

QuantScraper (@QuantScraper) posted at 3:06 AM on Mon, Sep 30, 2024:
Emini S&P Futures

Buying the last day of September at the Close and selling 1 to 5 days later has been bullish since 2000.

After 5 days:
24 Trades, 31.5 pts Mean, 79.2% Wins, 4.89 Profit Factor

$GLD #ES_F #SP500 $SPY $SPX #QQQ #NQ_F #ZB_F #GC_F #CL_F $EURUSD #VIX $TLT https://t.co/ORvCrjRT5F
(https://x.com/QuantS...0904884532?s=03)

King of the Charts (@ChartingProdigy) posted at 3:33 PM on Sun, Sep 29, 2024:
.
S&P 500 Top Likely Within 2 Weeks

Triple Negative Divergences are Forming on Indicators on S&P 500's Weekly Chart. Triple Divergences are one of the Strongest Reversal Signals in TA. As Recession Approaches, Earnings will Weaken, they will not Save the Market.

$SPX $SPY #FOMC https://t.co/7lQcs1Zz7t

Key developments that should provide more direction to U.S. markets later on Monday:
Dallas Fed September manufacturing survey, Chicago Sept PMI
Federal Reserve Chair Jerome Powell speaks in Nashville, Fed Board Governor Michelle Bowman speaks; European Central Bank President Christine Lagarde speaks to European Parliament; Bank of England policymaker Megan Greene speaks
US corporate earnings: Carnival, Precision Optics, Spectra Systems, EnerSys, Repositrak
US Treasury sells, 3-month, 6-month bills

Slow start as it is a holiday up here.  Was short all night with an average 5797 and took it off a little bit ago for a profit of 17 points for the cash open and now looking at a long on the ndx after the cash open.  Last day of September and not surprising were seeing some profit taking but as we enter October with a very expensive market, an election coming, calls way over inflated and sentiment strongly bullish it should be an interesting trading period.