U.S. Stocks, NASDAQ Attempt October Recovery

October trade is off and running, with U.S. stocks cutting into September’s losses. With only a few hours left in the Wall Street session, the DJIA DOW (+40), S&P 500 SPX (+16), and NASDAQ (+150) are all in the green. Today’s rally is a welcomed sight for equities bulls ― September was the worst month for stocks since March.

Throughout September, each of the big three American indices struggled mightily:

• DJIA (-2.3%)
• S&P 500 (-3.9%)
• NASDAQ Composite (-5.2%)

So, what was the reason behind last month’s downturn? The answer is two-fold:

• Election Uncertainty
• No Stimulus

At this point, these two market drivers remain in play. Polling data from the key battleground states of Florida, Pennsylvania, Michigan, and North Carolina all favor Joe Biden moderately. Also, the chances of a second COVID-19 government stimulus package being passed ahead of Election Day are fading. While many analysts are predicting an October bounce back, the DOW, S&P 500, and NASDAQ may be in for another challenging month.

December E-mini NASDAQ Challenges Daily Downtrend

At press time (about 2:00 PM EST), December E-mini NASDAQ futures are driving above 11,550. This is a solid recovery from September lows, measuring nearly 1000 points.

Going into Friday’s session, there’s one level on my radar for this market:

• Resistance(1): 62% Macro Wave Retracement, 11,761.75

Overview: Tomorrow brings release of U.S. Non-Farm Payrolls for September. The number is expected to come in at 850,000, down from August’s 1.371 million. 

If we see a positive Non-Farm Payrolls report, then the U.S. indices are likely to extend their weekly gains. For the December E-mini NASDAQ, this means a shorting opportunity from Fibonacci resistance (11,761.75) may come into play. As always, check back for details on how to get in on the action.