While last week it looked as if the US indices would simply ignore the weak seasonal period until mid-October, the daily candles of the last three days on all three indices I monitor show that they are likely to test the 10-week moving average. Should stronger downward momentum emerge, it could even go as far as the 30-week line - but this is clearly the alternative scenario. Specifically, I expect a small reduction in the overbought market situation on the S&P 500 up to the short-term uptrend in the region of 5,580 points.The positive underlying trend towards the end of the year remains in place for all three indices. The Chinese central bank provided a strong stimulus this week. In addition to the FED and the ECB, the Chinese central bank is now a new player actively intervening in the financial markets. In addition to interest rate cuts, various measures were also adopted, such as a quota for real estate and equity investments. In my view, this clearly falls into the category of “learning from the best”. After all, why should only the US dollar be used as a “financial weapon”? With Chinese share prices rising again, these securities are also becoming a kind of currency that can be used in corporate takeovers - a practice that has long been standard for US companies.In the USA, my focus continues to be on stable individual stocks, which are also holding up better in this setback. It is also interesting to note that commodity stocks in the US have shown renewed strength. I am curious to see whether a stock will come to the fore here, although they currently seem too volatile and not (yet) trend-stable to me. I have unwound my portfolio hedges despite the expectation of a correction, as my risk budget was exhausted and my stocks showed a relatively low susceptibility to correction. Should the correction start with more momentum instead of being as sluggish as it is at present, I may open a partial portfolio hedge via the S&P 500. However, my main focus is rather on smaller portfolio optimizations in the context of the expected correction with almost full investment.
