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S&P 500 monthly chart through September

S&P 500 Index monthly chart with 3 and 10-month moving averagesSeptember tried to continue the August volatility with a big gap-down to 2,891.9 on the first trading day of the month, followed by equally large gap-ups over the next two days. The index then traded in a range for two weeks, before selling-off hard on 24 September, and recovering slightly into the end of month. The index’s range for the month was 4.5% vs. 6.8% in August, and it closed the month above both the 10 and 3-month moving averages. It had closed August just below the 3-month moving average. Both moving averages have been rising, since May.

While September had been a decent month for the market, over the past two years, October has been decidedly sketchier. In the 2015 the index closed-out October with an 8% gain, in 2016 a 2% loss, in 2017 a 2% gain, and in 2018 a 7% loss. Does this pattern of alternation mean that the index is due for a gain in October? If only it were that easy!

The 10-month moving average currently sits at 2,835 or 4.8% below September’s 2,976.7 close. That is a bit far, for me, for a stop-loss. 2,900 is 2.6% below September's close.

-- Scrib