This may only be a start-of-month correction in anticipation of the earnings season, but the last two-day corrections are based on one of the most important components for investors, the behaviour of the economy that may affect corporate performance, i.e. Private consumption, which is valued not only in retail sales but mainly in confidence indices, which after several months of resilience in the face of various market risks, with the trade war at its head, has recently shown signs of yielding to pressure.
Whatever the outcome of the month of October, it is certain that the reputation of being very volatile will be matched, and it may leave the basis for the traditional Christmas rally or a correction until Christmas, as happened last year. It will be important to be mindful of economic data as well as business results, particularly regarding the outlook, as for much of the market the last quarter is the main quarter in sales and profits. In the short term, it is important not to take your eyes off the 200-day moving average that is now about to be retested by the S & P500.
