Bank of America technician Stephen Suttmeier explains why weak seasonals and tactical complacency could mean trouble for stocks heading into next month. » Read More
Stocks opened higher Wednesday after taking a breather in the previous session. But that's not coming as surprise to one top technician, who believes the market could be well on its way to retesting old highs.
"[The past few sessions] have been the best action I've seen in many months," Ralph Acampora told CNBC's "Futures Now" on Tuesday. "We slowed down a little [Tuesday], but I think that's a good thing." The S&P 500 closed slightly lower Tuesday, snapping its five-day winning streak.
Acampora, who predicted major problems for the market in late July, said the charts are now showing signs of a bottom, and he believes the worst could be behind us. "I was very concerned after the August 24 sell-off," said the director of technical analysis at Altaira Limited. "The rallies that [immediately] followed were not impressive." Since Aug. 24, the Dow and S&P 500 are up a respective 7 and 6 percent.
Crude oil soared nearly 5 percent Tuesday to its highest level in more than a month after U.S. government data showed a decline in production. The commodity has now rallied more than 27 percent from its August low, and the recent move is giving one expert major flashbacks.
"Comparing 1985 to 2015 in crude, there are a few similarities to highlight," Darren Wolfberg told CNBC's "Futures Now" on Tuesday. "Back in 1985 we saw a 69 percent sell-off in crude, we can call it a crude depression, and I think we've seen a similar pricing pattern now where crude oil fell 61 percent from its June 2014 high to March 2015 low."
According to Wolfberg, following both sharp declines were "corresponding short covering" rallies that took approximately 34 trading days to materialize. "In both instances we then saw this double-bottoming effect that happened over the next 100 or so days," added the head of U.S. cash equity trading at BNP Paribas. "In 1985, once we saw that double bottoming process play out, crude oil then rallied 110 percent. It went from $11 to north of $20 over the next year."
It's been a tough start to earnings season, with Yum Brands and Adobe Systems falling sharply after reporting their disappointing numbers. And that appears to be increasing the concern of a so-called "earnings recession."
Analysts in aggregate expect earnings to fall more than 5 percent compared to third quarter of last year, according to FactSet. Following the year-over-year earnings decline in the second quarter, this would actually mark the first two consecutive quarters of falling profit since 2009, FactSet reports.
Analyst earnings expectations tend to be overly bearish, and the average company beats estimates.
But if earnings do register the second straight year-over-year drop, it would represent a so-called "earning recession"—a parallel to a regular recession, which is marked by two straight quarters of negative GDP growth.
Before investors head for the bunker, they should note well the deleterious effect of the energy sector on overall numbers. Energy earnings are expected to plummet 65 percent versus the third quarter of last year, due to the sharp decline in oil prices.
According to RBC Capital Markets, expectations that exclude the energy sector are for earnings growth of 2.8 percent.
"Ex-energy trends appear more robust," RBC's equity strategy team writes, perhaps understating the market's growing worries.
After the release of a miserable jobs report Friday, some have seen fit to claim that employment is rising only for immigrants, and plummeting for native-born Americans. But a closer look at the numbers reveals a different story.
It is true that, according to the household survey, employment among native-born Americans slid from 124,314,000 in August to 124,052,000 in September. This came as the number of employed foreign-born American rose from 24,914,000 in August to 24,928,000 in September.
But there's a problem with the "they took our jobs" storyline.
Read MoreJob creation misses big in September
The number of unemployed foreign-born Americans also rose, from 1,142,000 to 1,204,000. Meanwhile, the number of unemployed native-born Americans fell from 7,021,000 to 6,423,000.
For that reason, the unemployment rate for foreign-born Americans rose by 0.2 percent, while the unemployment rate for native-born Americans actually fell by 0.4 percent — exactly the opposite of the shift some see occurring.
(Native-born Americans do still have a slightly higher unemployment rate, at 4.9 percent versus 4.3 percent. But at 61.8 percent versus 64.8 percent on the participation rate, fewer native-born people are in the labor force at all.)
So what's going on here? Are all the jobs going to foreign-born Americans, or not?
Quite simply, the overall number of native-born Americans in the labor force is falling, while the number of foreign-born Americans in the labor force is rising. That's why both employment and unemployment are falling for native-born Americans; it's the total group that is shrinking. This comes as more immigrants are in the labor force.
The numbers, then, should be taken as an indication of shifting demographics, rather than a shifting employment situation.
The market can't seem to make up its mind on crude oil.
The battered commodity has recently traded in a wide range of sharp swings, and has plunged more than 52 percent over the course of one year.
But looking ahead, Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas, said that there could be good news for oil on the horizon, specifically in a rate hike from the Federal Reserve.
Theoretically, a rate rise should be bad for oil, because increased interest rates would strengthen the U.S. dollar against other country's currencies.
Meanwhile, oil is inversely related to the dollar, because as the greenback rises, the value and price of oil, bought in U.S. dollars, tend to fall.
However, Wolfberg said expects the opposite to happen for two reasons.
"Historically when the Fed raises rates, that's actually the top in the dollar," Wolfberg said Tuesday on CNBC's "Futures Now." "Secondarily, the Fed's going to raise rates because the economy is good. And usually that means more demand of oil."
Crude oil has struggled to break above $47 a barrel in September, Wolfberg said Tuesday afternoon, but if it reaches above that level, he could see oil back up around $50 to $60.
Until oil recovers, "I think you really gotta buy the dips and sell the rips," he said Tuesday.
It is often said that hope is not an investment strategy. Yet that chestnut may not apply to central bankers, because hope appears to be the Federal Reserve's strategy of choice when it comes to inflation.
In a Thursday speech delivered at the University of Massachusetts Amherst, Fed chair Janet Yellen predicted that at long last, inflation is set to hit the Fed's long-run 2 percent inflation target in the years ahead.
Though inflation has been running at "essentially zero" over the past year, "the Committee expects that inflation will gradually return to 2 percent over the next two or three years," Yellen said.
Furnishing the below chart, she reasoned that much of the inflation "shortfall" is likely due to low energy and non-energy prices—both of which can be pinned on sliding oil and the surging U.S. dollar.
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