What A Difference A Week Makes

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It was exactly a week ago (Thu 10/14) that the futures were ramping up for what turned out to be a character changing day. Over the weekend, Callum Thomas posted the above chart on seasonality in his widely followed “Chart Storm” and I saw many on Twitter embracing the idea that the traditional year end rally was on. The Chart Report made Thomas’s tweet its Chart of the Day on Monday. This has become THE narrative IMO. While the market couldn’t make new ATHs yesterday and the futures are currently down, I think you have to give the bulls the benefit of the doubt at the moment.

That being said, it’s important to understand that nothing fundamental has changed. All of the bearish forces that I have been writing about in the last month are still in play (see “Inflation, The End of the Bond Bull Market and The Second Great Depression” (10/4), “FDX & KMX Are Canaries In The Coal Mine” (10/1) and “Whistling Past The Graveyard” (9/24)). It’s just that, as Ben Graham famously wrote in The Intelligent Investor, Mr. Market is a manic depressive and he’s in a really good mood right now.

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