• Correction likely over
• New highs by Thanksgiving?
• Feds likely to cut rates at October meeting

The S&P 500 index has corrected 5.5% from the October 11th high of 1,576 to the double bottom lows made October 22nd and 24th at1490. This is a normal pull back in a rising market. The influence of the down cycle is now past and we are within one week of entering the November through April up seasonal time period. The down move was enough to move Bullish investor adviser sentiment off of its 5-year highs and to push short term technical indicators to sharply oversold levels. Unfortunately, it also took out the stops on the three indexes we track for this letter which means we have moved from an ‘up trending’ market to a ‘trading range market.’ With that said, I believe we are at the bottom of the ‘range’ and can expect the market to trade to the top of the range, possibly to new highs, by Thanksgiving.

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Posted by Michael Chapman at 1:59 PM PDT