The stock market correction that started on September 19th reached its nadir on October 15th with a dip of 7.4%. As of today (October 31) the correction is already over, and the S&P 500 index has reached a new all-time high of 2018. I predicted in my previous post that the market was destined to continue rallying in the next few weeks, but I didn't think it would resume this quickly.
Short-term investor emotion is still pessimistic (which is a bullish indicator), internals are still bullish, and the seasonal cycle is at its peak bullishness. Thus, despite our serious economic problems, the objective technical forecast for the stock market is UP.
In other news, the price of gold has reached a 4-year low, which is what one would expect in a deflationary scenario, rather than the inflationary situation that we've been in thanks to the
counterfeit money printing quantitative easing by the Federal Reserve Bank. This counter-intuitive behavior is yet another example of why I try not to make forecasts based on economic fundamentals.