Do we deserve to be here? Judging from earnings so far, I'd say no but the rally has kept going with a massive 275-point (5%) surge in the S&P 500 so far in October. The real move we care about was the one from 4,390 to 4,550 – just 140-points but that causes us to expect a 28-point (weak) retrace to 4,522 or a 56-point (strong) retrace to 4,496 in the very near future – probably tomorrow.
Tomorrow is our first look at the Q3 GDP and expectations by Leading Economorons are still averaging 3.2%, which would be down 50% from Q2s GDP of 6.7% but the Atlanta Fed, based on silly things like Data – are telling us GDP is more likely to be 0.5% – that's quite the discrepency. Will the market care either way? A GDP Report so close to retraction could spur Congress to print more money and/or keep the Fed printing theirs with QE – both have been a big positive for the markets.
This morning we got the Durable Goods Report and the headline there is MINUS 0.4%, down from +1.3% in the August report – which wasn't very good anyway.