Gene Peroni's Daily Podcast

It has been a solid week as we move through the thick of the earnings season and so far the earnings are delivering for the most part. 

The Dow surpassing its previous intraday and record-high levels, closing about 150 points higher in the session; but we’re not seeing much fanfare with the Dow lower this morning. 

The stock market continuing to resist decline; yesterday the Dow moving higher and within about 200 points of its all-time record high. 

Today marks the 34-year anniversary of the 1987 stock market crash. Certainly the technical elements today are far different than what we saw in the days and weeks leading to that crash. 

Tomorrow marks the 34-year anniversary of the 1987 stock market crash. On the Friday before the crash…

The VIX has retreated below the 17 level, which is approaching its longer-term baseline and that would imply that some of the worst fears have played out. 

Strong earnings results among the financials and the major market indices higher this morning. 

Financials have regained their longer term leadership stature in the stock market and this year we have seen good relative strength strides in many of the stocks representing this category. 

For some months now the stock market has been reflecting a just to normal; not a “new normal” but a more traditional normal – seeing traditional themes outperforming stay-at-home themes. 

In last Thursday’s trading the Dow surged above the resistance channel between 34,500 and 34,700, but by the end of the day it did retreat back into the upper part of that range. Seeing some further weakness this morning. 

The last 2 trading days have surely been encouraging with respect to price action in a number of stocks, sectors and themes; but to me the most constructive factor has been…

The money flow trend showing improvement in yesterday's trading, specially in technology. 

The Dow breaking below 34,000 yesterday but managed to close above that level on a closing basis — a technical victory. 

As we approach the 3rd quarter reporting earnings season the question becomes, “Just how much has the market baked in some of the headwinds imposed by…?” 

September did prove to be a difficult month just like it has historically proven; perhaps “difficult” is too light a word as it was pretty brutal at times. 

Sharp selling pressure in technology yesterday is carrying over into today. I think what we’re seeing here is reminiscent in earlier this year when the momentum growth categories went into an aggressive rotational consolidation. 

“30 days half September” which means there are only four trading days remaining in September and the 3rd quarter of 2021. The market is in a bit of a limbo stage. 

The trading actions so far this week in the stock market have had similar technical earmarks to other declines in this bull market cycle. 

I would categorize yesterday’s action as a “hangover Monday” in which traders are reacting to news from over the weekend, especially the news out of China that acted as a catalyst for the decline. 

The VIX breaking out this morning above the 25 level. Friday may have been a clue of what was to come this morning… 

I would characterize the stock market’s performance this week as having a moderately negative bias; rallies have been cut short by selling but the selloffs have been met with some buying. 

Calls continue for a 10–20% market decline. I believe that wouldn’t be so likely without the occurrence of some kind of event that broadsides the market. 

September can be a challenging month — historically the most challenging — for stocks. September’s volatility can bring about a situation where the major market indices mask the underlying market. 

Yesterday’s session was a study in contrast between value and growth; that was reflected in part in the fear index which rallied sharply. 

Stocks higher this morning, though as we’ve seen in the month of September these gains can fizzle out, but I don’t anticipate that happening today.