End of the week converging with end of the month is an appropriate recipe for caution, especially when the market delivers one of its best monthly performances in quite some time. October bears appear to have already visited in September and August and  hibernated early in October. Combine the above with the ingredients of positive, negative, and neutral economic data and most will scratch their heads. It is no wonder that the stock market sold off during the second half of the trading session and closed relatively unchanged.

The SP-500 closed @ 2079.36 (-10.05 / -0.48%). The Nasdaq-100 ended @ 4648.83 (-21.94 / -0.47%) and the Rusell-2000 displayed the most relative strength @ 1161.86 (-3.77 / -0.32%).

The VIX closed @ 15.07 (+0.46 / +3.15%).

Treasury rates gave back some of their gains with the 10-Yr @ 21.51 (-0.22 / -1.01%) and the 30-Yr@ 29.33 (-0.32 / -1.08%).

The US Dollar Index’s retreat from resistance continued as it closed @ 96.92 (-0.29 / -0.30%).

Our two key commodities delivered another day of mixed performance. Weakness in Gold persists as it is now testing support at its 55-day moving average and closed @ 1141.70 (-3.80 / -0.33%). WTI Crude Oil finished the week with a key bullish reversal pattern to end  @ 46.39 (+0.33 / +0.72%).

The Dow Jones Real Estate Index finished the session @ 295.16 (-2.33 / -0.78%). While the Dow Jones Home Construction Index diverged from the rest of the market into positive territory @ 577.74 (+6.78 / +1.19%), it was unable to surmount resistance at its 22-day moving average.

Daily Chart Analysis

The market took a well deserved rest at its resistance line, i.e. bottom channel of the previous uptrend. Let’s see if it can surmount this challenge next week. Until then, remain Hillbent for the Market Direction…

Market Breadth

• Advancers (1249) vs. Decliners (1642).
• New 5-day highs (611) vs. New 5-day lows (511)
• New 52-week highs (322) vs. new 52-week lows (231)
• Bullish reversals (383) vs. Bearish reversals (335)

Volume Radar Alerts

Stock prices increasing on high volume

• Expedia Inc. (EXPE) @ 136.30 (+7.27%) on 329% volume surge
• LinkedIn Corp (INT) @ 240.87 (+11.00%) on 325% volume surge
• GNC Holdings Inc (GNC) @ 29.75 (+5.35%) on 304% volume surge
• Telephone & Data Systems Inc (TDS) @ 28.64 (+5.22%) on 298% volume surge
• Trimble Navigation Ltd  (TRMB) @ 22.75 (+21.40%) on 277% volume surge

Stock prices declining on high volume

• New York Community Bancorp (NYCB) @ 16.52 (-2.02%) on 1124% volume surge
• Aarons Inc (AAN) @ 24.67 (-26.47%) on 1120% volume surge
• Solarcity Corp (SCTY) @ 29.65 (-22.12%) on 832% volume surge
• CVS Health Corp (CVS) @ 98.78 (-4.84%) on 369% volume surge
• Credit Acceptance Corp (CACC) @ 189.09 (-9.80%) on 348% volume surge

Market Moving Events

Bullish

• Economy / Growth / USA: The Chicago PMI report for October-2015 increased robustly to a level @ 56.2 vs. consensus @ 49.2 and prior @ 48.7.
• Economy / Employment / Europe: The EU Unemployment Rate for September-2015 improved to 10.8% vs. consensus @ 11.0% and previous revised @ 10.9%. This has been the region’s lowest level since January-2012.
• Economy / Inflation / Italy: The CPI (Consumer Price Index) for September-2015 rose to  monthly rate @ 0.2% vs. consensus @ 0.1% and prior @ -0.4%. Annually, it was @ 0.3% vs. consensus @ 0.2% and prior @ 0.2%.

Bearish

• Economy / Consumer / Germany: Retail Sales for September-2015 were flat @ 0.0% vs. consensus @ 0.4% and previous revised @ -0.7%. Annually, they changed 3.4% vs. consensus @ 4.0% and previous revised @ 2.1%.
• Economy / Growth / Canada: Monthly GDP in Canada for August-2015 was @ 0.1% vs. consensus @ 0.1% and prior @ 0.3%. Year-over-year, it expanded @ 0.9% vs. prior @ 0.8%.
• Economy / Inflation / France: Although Producer Price Inflation (PPI) for September-2015 was up 0.1% monthly vs. consensus @ -0.2% and prior @ -0.9%, the annual rate was -2.6% vs. prior @ -2.1%.
• Economy / Growth / Switzerland: The KOF Leading Indicators for October-2015 indicated a level @ 99.8% vs. consensus @ 100.0% and prior revised @ 100.3%. With this being the first sub-100 reading since July-2015, there may be cause for the SNB (Swiss Nat’l Bank) to continue is loose monetary policy.

Neutral

• Economy / Inflation / USA: The Employment Cost Index for Q3-2015 indicated that wage inflation grew quarterly @ 0.6% vs. consensus @ 0.6% and prior @ 0.2%. Annually, it expanded @ 2.0% vs. prior @ 2.0%.
• Economy / Consumer / USA: Consumer Sentiment during October-2015 was @ 90.0 vs. consensus @ 92.5 and prior @ 92.1.
• Economy / Consumer / USA: September-2015’s Personal Income and Outlays report was somewhat weaker than expected. Both personal income and spending were @ 0.1% vs. consensus @ 0.2% and previous respectively @ 0.3% and 0.4%. The monthly Core Price component, a Fed favorite, declined to -0.1% vs. consensus @ 0.2% and prior @ 0.1%. Year-over-year, the Core Price Index remained @ 1.3% vs. prior @ 1.3%
• Central Banks / Monetary Policy / Russia: In a surprise move, the Bank of Russia decided to keep interest rates unchanged @ 11.0% due to persistent high inflation risks. Inflation during October ran as high as 16.0%. With a stagnant economy, businesses are starving for capital tighter monetary policies will only exacerbate its economic woes and weakness of its currency.
• Economy / Consumer / France: The Consumer Manufactured Goods report for September-2015showed a monthly decline @ -0.1% vs. consensus @ 0.2% and prior @ 0.3%. Annually, it consumers increased spending on manufactured goods by 2.9% vs. prior revised @ 2.4%.