Money Control Place
  • Politics
  • Business
  • Stocks
  • Investing
  • Politics
  • Business
  • Stocks
  • Investing

Money Control Place

Stocks

Stock Market Weekly Update: 3 Valuable Points You Need To Know About the Selloff

by October 13, 2023
October 13, 2023
Stock Market Weekly Update: 3 Valuable Points You Need To Know About the Selloff

It’s been a challenging week—geopolitical worries, no Speaker in the House of Representatives, hotter-than-expected inflation data—which means the stock market will likely continue its choppy movement. Now, the focus turns to earnings, with JP Morgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) all reporting better-than-expected figures.

Earnings season could keep the stock market smooth over the next few weeks, but it may end up being more distracting than anything else. Given the larger picture of global events, it’s best to tread carefully.

Broader Market Holds Support

When September, a seasonally weak period, came to an end, investors felt a sense of relief, since the worst month was over. It was a dismal month, but, despite the pullback, the broader indices are showing some signs of recovery. The S&P 500 ($SPX) held its 200-day moving average (MA) support. The Dow Jones Industrial Average ($INDU) fell below its 200-day MA and is battling to break above it. The Nasdaq Composite ($COMPQ) held up well above its 200-day MA. The chart below shows how the Nasdaq Composite bounced off its 38.2% Fibonacci retracement level and is now facing resistance from its 50-day MA.

CHART 1: THE 38.2% FIBONACCI RETRACEMENT IS THE SUPPORT LEVEL TO WATCH. The overall trend is still down but if the Nasdaq Composite bounces back and breaks above the downward-sloping trendline (red dashed line), it could be positive for stocks.Chart source: StockCharts.com. For educational purposes.

The series of lower highs and lower lows is still in play, indicating that the market is in a consolidation phase. That must change to higher highs and higher lows to confirm an uptrend. And given that the mega-cap tech stocks hold the line in the Nasdaq Composite, keeping a close watch on the index for any change in investor sentiment is a good idea.

Investors Aren’t Panicking Yet

Speaking of investor sentiment, given the rise in uncertainty, it’s not surprising to see the CBOE Volatility Index ($VIX) rising. The VIX, considered the market’s “fear gauge,” has been moving between 12 and 21 for the last few months, within a relatively normal range. Friday’s high got pretty close to the high of the range, but pulled back to close at 19.32. It’s nowhere close to its massive over-80 spike that occurred when the pandemic hit.

CHART 2: THE CBOE VOLATILITY INDEX ($VIX) IS STILL MEEK, RELATIVELY SPEAKING. Even though the VIX rose in today’s trading, it’s still not indicating panic among investors.Chart source: StockCharts.com. For educational purposes.

At the onset of the Ukraine-Russia conflict, VIX spiked to around 36, which is high, but relative to 80, it’s pretty tame. But that doesn’t mean all is complacent. If you see the VIX spike, it’s an indication that investors are starting to panic. Have a backup plan in case the stock market goes awry.

How Should You Prepare?

If the VIX shows signs of fear, look at how the “risk-off” sectors, such as Utilities, Consumer Staples, and Real Estate, perform. The type of stocks most exposed to geopolitical winds tends to do worse when volatility ticks up. These can include Industrials, Materials, Technology, and Financials.

When volatility spikes, investors also flee from stocks and into fixed income, gold, the US dollar, and cash. Gold futures rose above $1,900 per ounce on Friday (see chart below), but gold is still underperforming the S&P 500. Investors may gravitate toward gold ahead of the weekend in case tensions escalate. If this were to happen, it wouldn’t be surprising to see investors pile into the “risk off” areas.

CHART 3: GOLD PRICES SURGE. Investors likely fled to gold ahead of the weekend, in the event of escalation of geopolitical tensions. Chart source: StockCharts.com. For educational purposes.

That doesn’t mean you should rush to the “risk-off” type of investments immediately unless you’re a short-term trader who gets in and out of assets based on short-term price action. You’re better off letting the dust settle and seeing where things end up. So far, despite the selloff, the broader indexes are still holding on to support levels. There’s no need to panic just yet.

End-of-Week Wrap-Up

US equity indexes mixed; volatility up

$SPX down 0.5% at 4327.78, $INDU up 0.12% at 33670.29; $COMPQ down 1.23% at 13407.23$VIX up 15.76% at 19.32Best performing sector for the week: EnergyWorst performing sector for the week: Consumer DiscretionaryTop 5 Large Cap SCTR stocks: Vertiv Holdings, LLC (VRT); Super Micro Computer (SMCI); Applovin Corp. (APP); Plantir Technologies, Inc. (PLTR); Jabil, Inc. (JBL)

On the Radar Next Week

Earnings from Bank of America (BAC), Goldman Sachs Group, Inc. (GS), Johnson & Johnson (JNJ), Lockheed Martin Corp. (LMT), United Airlines (UAL), Netflix, Inc. (NFLX), Tesla, Inc. (TSLA), American Airlines Group (AAL), and many more.September retail salesFed speechesSeptember housing starts

0
FacebookTwitterGoogle +Pinterest
previous post
Walgreens names veteran health care executive Tim Wentworth as next CEO
next post
Looking At a Perfect Pullback Opportunity

Related Posts

Crucial Insights: How Rising Rates IMPACT You!

September 8, 2023

Trifecta of Trouble

April 6, 2024

Two EASY But INSANELY POWERFUL Ways to See...

November 11, 2023

MEM TV: Market Uptrend Endures Ahead of BIG...

January 27, 2024

Plenty of Strength in HY Bond A-D Line

December 22, 2023

Equity Markets Struggle to Hold onto “Go” trend...

April 19, 2024

New PMO Crossover BUY Signals Across All Major...

November 4, 2023

Commodities Trade Analysis: Aluminum

January 10, 2024

Is this a Dead-Cat Bounce or a Bounce...

May 4, 2024

Analyzing the SPY: How to Know When the...

April 26, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • How I Triple My Returns With 3x Leveraged ETFs!

    • How to Find Compelling Charts in Every Sector

    • EVs Now Emit 73 percent Less Than Gasoline Cars Over Their Lifetime, Says ICCT Study

    • Cygnus Metals Limited: Issue of Performance Rights

    • FPX Nickel Announces Share-Based Compensation Grant

    • Blue Lagoon Resources Officially Opens Dome Mountain Gold Mine in British Columbia

    Categories

    • Business (1,287)
    • Investing (2,662)
    • Politics (3,699)
    • Stocks (1,711)
    • Uncategorized (20)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: MoneyControlPlace.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 moneycontrolplace.com | All Rights Reserved