Outline of a Cold Autumn Market

A $34 billion IBM for RHT deal in software at a hefty premium seems to have helped propel another attempt at a relief rally in the broad market this morning. As I write this, most of the major averages are higher anywhere from 1.3% to 1.66%.

Once again, the pertinent issue for us is whether bulls can hang onto these early gains, a fairly arduous task for them throughout this corrective month of October. At some point, if we do not face an outright crash one would think a more meaningful multi-day rally will materialize.

But first things first, and gauging the QQQ (ETF for the top 100 stocks in the Nasdaq Composite Index) on its 30-minute chart, below, we want to see the pattern of lower highs and lower lows broken with a move over $172, at least. As you can plainly see, despite the feel-good start to Monday, bulls have not quite broken the corrective structure of the latest thrust down in this correction over the last two weeks or so. 

As an aside, Amazon is red and lagging this rally badly. We noted for Members this weekend that we ought not rely on prior market leaders to pull us out of this correction for a variety of reasons, and this AMZN action is a good example why.