The October market story is really complicated.
If you thought September was confusing, October is not likely to be any better, and it could be significantly rockier.
That's because the "buckets" that have moved markets on various days in the past few months are all potentially in play:
All of this should be making traders nervous. With valuations high, there's an awful lot that can go wrong.
But there is a surprising amount of optimism, at least among the professional trading community.
"Nearly every day we get economic news better than expected, and I still think that is what will win the day," said Jim Paulsen, chief investment strategist at The Leuthold Group. "You have consumers buying. Housing and auto sales are strong. IPOs are coming back to life. "
What about a spike in infections? Paulsen acknowledges there's concern that a spike could slow down fourth-quarter growth, which is why he believes another stimulus package is important to keep the markets going. Aside from that, he offers a novel interpretation of how to look at a fourth-quarter spike: "The country will likely start focusing more on whether the death rate spikes than the infection rate. Most of the country is operating much more safely than a few months ago, both personally and on the corporate level. So I think infections still matter, but the death rate is what will matter far more."
More layoffs coming? "It's not good, but look at the job growth. So far there's probably less than 50,000 announced layoffs, look at the ADP numbers. Over 700,000 jobs."
As for valuations, many traders feel the mid-September correction, which saw the S&P 500 drop about 10% and 15%-20% declines in many megacap tech stocks, was just the tonic the market needed.
"A lot of the weak hands got shaken out during the correction in mid-September," said Alec Young, chief investment officer for Tactical Alpha.
"We are still 200 points below the old high in the S&P," he said. "The market may need a while before it can make a new high, but there are more risks of being out of the market than being in. As long as we get a fiscal deal, the market will grind higher."
One last positive note: As we enter earnings season, the early reports have been almost all positive, and earnings have been slowly creeping up, not down.
"There are a lot of uncertainties, but there is so much going right analysts and companies are going to revise their estimates upwards," Paulsen said. "Wall Street is going to be revising up not just its fourth quarter, but it's 2021 numbers as well."
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.