A very significant market juncture right here. The major averages reversed early weakness Thursday to close firm near highs of the day. If this strength can hold Friday then the rotational low has started. By rotational low I mean stocks will gain strength in some sectors first and then rotate others as the first  group rests. A couple of stocks that I think will lead are Google and Tesla. Take your cue from those two Friday. If those two fail, then the market could be in for more chop and weakness into November. If they can lead then the market looks a lot better. 

But there is one sign that will be a key sign if the market will keep getting softer. This is what I’m watching.

(Special Alert: I have been watching signals triggered by big trades moving tickers beneath the surface. These traders execute trades in a way that makes them less obvious to regular chart watchers. If you want to see the signals and learn how it works, click here.)

We must keep an eye on crude oil (chart). If it starts trading above $100 where it has declined 5 times in the last year, then the market isn’t going up. These cross currents may well mean we see a rather jagged ugly choppy low forming while some stocks start a year end rally and others search to find a low. So stock selection will be key. 

Short term I think it will rally into early next week for broad averages.

Thanks,

Joe