by Brooke Thackray, alphaMountain Investments
Market Update
October provided a wild ride for the stock markets – living up to its reputation as the most volatile month of the year. After months of complacency, the S&P 500 struggled for direction, moving up and down in large increments. There were twenty-three trading days in October, and twelve of those days had movements up or down by greater than 1%. This is an extraordinarily large number.
The VIX peaked in mid-month, reaching a high of 31.06 on October 15th. On the same day, the S&P 500 reached its closing low of 1862. The stock market has rallied strongly since, and now sits at 2032 as of November 7th. The first half of October was characterized by investor fear, as investors were concerned with the “lone wolf” terrorism in both Canada and the U.S. and the possibility of Ebola spreading in the U.S. Mid-month, the concerns died down at the same time better than expected earnings were hitting the markets, resulting in a “V-shaped” rally.
The S&P 500 is currently touching on all-time highs once again. Now that the earnings season is largely out of the way, and we are past the non-farm payroll numbers, the S&P 500 will probably try and find direction at this point.
Do not be surprised if the stock market moves higher and then returns back to current levels, or moves lower and drifts back to current levels. After a strong run of approximately 9%, and with a lack of drivers to push the market higher, a strong move higher from this point is probably going to take some time to develop. The good news is that the last part of November and the December are seasonally strong for the stock market.
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