Market Lab Report - Premarket Pulse 9/28/15
Nevertheless, markets sold off due in part to concerns that House Speaker John Boehner is leaving Congress at the end of October which could lead to a government shutdown. That said, government shutdowns have occurred numerous times since the 1970s. Each time, markets have reacted with only mild negativity with both the S&P 500 and NASDAQ Composite down on average less than a percent.
Futures are down almost half a percent at the time of this writing on continued concerns about growth issues in China. The country’s industrial profits in August fell 8.8% from a year ago. The world’s second largest economy seems to be slowing faster than expected.
However one might wish to spin the news to fit the market's action, the bottom line is that stocks have been in a choppy sideways consolidation since the "Capitulation Monday" lows of late August, and many leaders that bounced in that process have started to roll over again. This, of course, brings into play the possibility of a new down leg developing at some point in the very near future, one reason why both the Market Direction Model and Volatility Model shifted to a sell signal last week.
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