What's Next for the S&P? Year-End Rally? You Responded (And You're Usually Right)

Note: Monday is Yom Kippur, the Jewish Day of Atonement, a holiday I observe. Therefore, there will not be an edition of Top Stocks Monday evening. I will resume on Tuesday. For those who observe, have an easy fast.

The Market

Each weekend I run a market poll on Twitter (sorry, it will always be Twitter!) where I ask what folks think the next 100-point move in the S&P 500 will be. Typically, I get around 3,000 responses. Don't focus on whether that is a lot or a little, just know that once we get to around 500 votes, the numbers rarely change.

Mostly the folks who respond to my poll are correct, meaning the majority generally pick the right direction. Oh sure they can be off from week to week, but even in July when they stayed steadfastly bearish while the market rallied, they were obviously proven correct by August.

Anyway, this weekend I decided to run a second poll, asking if folks expect a year-end rally. You see I noticed this week that even if folks were bearish short term there was an almost unanimous view that we'd get a year-end rally. So I decided to poll it.

Aside from the fact that the majority voted "down" when asked the next 100 points (44 "up" vs. 56 "down"), there were approximately 3,000 votes (typical). However, in the year-end rally poll, where a very large majority (67-33) voted yes, there were nearly 4,000 votes, and I didn’t decide to do that poll initially so the polling time was an hour less.

I share this story with you because I have been saying sentiment seems somewhat complacent to me. My takeaway is that folks are pretty darn confident that whatever happens in the next few weeks, there will be a year-end rally, thus the propensity to cast a vote in one poll more than the other. Sure, it's pure speculation on my part since I have no historical basis on the second poll, but that’s my initial summary of it.

Friday's market action was interesting in that there was a late-day whoosh of sorts. Having come so late in the day the breadth was fairly flat and the number of stocks making new lows did not expand.

The Russell 2000 has been red for six straight days now. The last time it went to seven was more than a year ago so let's not be surprised if there is a rally on Monday. I maintain that we are oversold enough to rally but I still sense sentiment is not panicky and volume remains tepid.

New Ideas

Should the market be weak out of the gate on Monday I would have my eyes on iShares Russell 2000 ETFIWM. There is an uptrend line that comes in around $175 and there is a gap from June that fills around $175.50. In the short term that's the area I'd look for a short-term bounce.

Today’s Indicator

The NYSE Hi-Lo Indicator is at 0.30. Oversold is under 0.15.

Q&A/Reader’s Feedback

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Now that DeereDE has come down, the question is can BungeBG be far behind? You might recall a few weeks ago I thought BG was vulnerable to a break and it held and rallied anyway. If the stock breaks $110 then the short-term target would be $105.

Is VanEck Gold MinersGDX, an ETF to be long gold stocks, at a bottom or a top? I have to give it credit for not breaking while the dollar has rallied but I just don't see a reason to buy it. I had thought last week SPDR Gold SharesGLD could/should rally. It did for a day or so and then it went plop, although it too did not break. I'd wait for GDX to cross $30 before thinking it isn't going to break down.

I would look for RokuROKU to get oversold and bounce off that line around $65-67, but on a rally to $75-80 I'd be a seller.