Stocks Fall On October 2 As Downside Risks Build
Stocks fall on October 2 as technical trends begin to weaken.

Stocks Fall On October 2 As Downside Risks Build

October 2, 2020


Macro – SPY 

Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL 

Stocks fell today in a rocky session, with the S&P 500 trading lower by about 1%, while the NASDAQ 100 fell by over 2.8%. There was a modest rotation today out of technology into some sector that might benefit from another stimulus. Whether or not a stimulus comes from Washington is yet to be seen.

The latest jobs data was a bit of a disappointment, with the headline non-farm payroll missing estimates. More concerning to me was the unemployment rate, which fell, but only because the labor pool shrank, and because more people left the workforce. A trend that is not moving in the right direction. 


The importance of today’s move lower should not be underestimated. The S&P 500 was stuck below the 50-day moving average all week until it managed to break above it on Thursday. Then quickly, on Friday, we traded right below that moving average, a rejection of the previous days advance. Additionally, we fell out of the rising wedge, bear pennant pattern I had noted on Thursday. 

The pattern is bearish and suggests that the index likely has further declines that lie ahead—more this weekend.

Have a good night, 


Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.