There are some Nervous Nellies out there and with good reason. Stocks have been treading water for a couple of weeks now.

Plus, external factors and forces seem to be weighing on the market. What are they? Take your pick. Mass sell-off in precious metals, weak jobs report, talk of interest rate hikes, and a virtually non-existent IPO market. Oh, and this month is October, everyone’s fearful month, with the commencement of Q3 earnings occurring this week.  And, lest we forget that we are nearing election day where vote for the Dirty Old Thin-Skinned Man or The Lyin’ Cheatin’ Unethical Hag.

Can we have a duel at twenty paces instead?

Anyhoo...all of these proverbial arrows pointing downward may yet bode well for the market. Not to mention the end of the election season just weeks away. The trigger, however, is likely to be earnings. No, I am not talking about the 3Q16 earnings season. That is likely to be a bust, with another year-over-year decline, led by weak energy results.

Instead, investors could be heartened by the end of this multi-quarter earnings decline, beginning in Q4.  We may yet have to deal with some volatility for a spell, but the light is at the end of the tunnel as we approach the end of the month and reporting companies comment or provide guidance on future periods.  On the other hand, if Q4 is a repeat of Q3, that would put a short term hurt on us. Let’s hope not.

The Stock Market Today

Random Thoughts

Small biotechs have had mixed activity in recent weeks in terms of performance and other factors. We have seen more coverage of microcap biotechs by middle market firms of late. Yet, we have seen steady (but not necessarily) large insider sales. There is no correlation but it could indicate a divide between those with solid prospects and those with catalysts further down the road.

Consumer discretionary (CD) stocks ran for most of the year, then sold off. The group, including the casual dining category appears to have weathered the storm and even with a poor jobs report, offer good value and upside. By the way, the CD segment may enjoy the biggest year over year increase in earnings, as polled by Factset.

When big names fall it can be ugly. The market is replete with examples every year. Aside from the spectacular Theranos disaster, Twitter (NASDAQ—TWTR) and FitBit (NYSE—FIT) just look bad.

Monday could be a nice up day for the market with the bond market closed for the Columbus Day holiday. At least it won’t have a bond market-led economic overhang for a change.

Say What?

Great info, insights, and hard-hitting stories make up this week’s Say What? feature...

The New York Post


Reasons for rebellion?



The down and dirty

USA Today


Look like we will get a rest here.



What does the future hold?



Oh my. Should be entertaining.

Notable Numbers

AAII Sentiment Survey (figures rounded)

  Current Last Week Long Term Avg
Bullish 29% 24% 39%
Neutral 44% 39% 31%
Bearish 28% 37% 30%

Well, the Bearish camps for both polls are the same but the similarities end there. The pros are more bullish than the individuals and while I agree that they should be favorably opinionated, we see moves higher in the offing, rather than around the corner. Interestingly, the Investors Intelligence figures indicate a marked return to Bullish from just 2 weeks ago. With mutual fund outflows seemingly in check, or not getting worse, perhaps bright skies lie ahead.