Major averages fell yesterday on higher volume with all majors now trading below their 50-day moving averages.
Ahead of the November 8 elections, given the extent of manipulation that has gone on in the markets via QE and also in the elections, the status quo wishes to preserve order. The markets thus need to continue to reflect the notion that all remains on the mend in the economy. This naturally puts a floor of sorts on any meaningful correction prior to the elections. At the same time, any meaningful moves to the upside remain muted given the truth about the global economy.
Fortunately, November 8 is just around the corner, so renewed levels of volatility in either direction will most likely be the order of the day and the coming weeks. As we wrote in yesterday's piece, the S&P 500 has never traded in such a shallow band in its entire 59-year trading history.
Reversing some of yesterday's losses that came on higher volume, markets are trading slightly higher on strong earnings reports from a variety of companies including TWTR and TSLA.
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