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Weekly Economic and Stock Market Commentary – October 19, 2020


October 19, 2020 – As for the stock market specifically: Markets were mixed to little moved last week. The market see-sawed with substantial moves each day before calling it quits Friday afternoon.

As of October 19, the major market averages are back close to the record levels of early September, but we still have 10 trading days left in the month so hold-on tight as anything can happen.

The bullish percent indicators showed strengthening last week. We continue in WEALTH ACCUMULATION MODE at this time.

Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.

Below is where our indicators stand as of October 16, 2020 (Courtesy Dorsey, Wright, and Associates).

On a general note: The Department of Commerce gave us the most important economic news of the week. They reported September retail sales rose 1.9% from August levels. That was the fifth consecutive month of gains for retail sales. It also was well above the anticipated gain of 1.2% Car sales led the way, with a gain of 3.6%. The report stated that car sales comprise 20% of the calculation. Sales rose in every category with the exception of electronics stores.

The bad news report for the week, October 19, comes from the Federal Reserve’s report on industrial production. The news here is that industrial production in September fell for the first time in 4 months. The decline was 0.6%. The consensus estimate of economists called for a gain of 0.4%. September output was approximately 0.7% below February levels.