We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • Palladium Vastly Outperformed Gold Prices in 2019. Is it Topping? - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/10/24/Palladium-Vastly-Outperformed-Gold-Prices-in-2019.-Is-it-Topping.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #xpdusd #PALLADIUM
  • My trading video for today: 'Dow Winds Up Despite #Earnings Run, Watch $EURUSD with #ECB, Brexit Anticipation' https://www.dailyfx.com/forex/video/daily_news_report/2019/10/24/Dow-Winds-Up-Despite-Earnings-Run-Watch-EURUSD-with-ECB-Brexit-Anticipation.html?utm_source=Twitter&utm_medium=Kicklighter&utm_campaign=twr
  • The #Euro has mounted an impressive rally against the US Dollar, moving to challenge the bounds of the trend leading it lower since mid-2018. Get your $EURUSD market update from @IlyaSpivak here: https://t.co/fIkLmThWMK https://t.co/W7QwuWhrTg
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.95%, while traders in US 500 are at opposite extremes with 78.66%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/2j4Lx7rVLT
  • #BRL, #ZAR and #GBP are expected to be the most-active majors versus #USD with one-week implied volatility at 13.55, 13.13 and 11.17 respectively
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.08% 🇪🇺EUR: 0.05% 🇨🇭CHF: 0.03% 🇨🇦CAD: -0.05% 🇦🇺AUD: -0.10% 🇳🇿NZD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Fy3dfUZ2kK
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: France 40: 0.14% US 500: 0.08% Wall Street: 0.06% Germany 30: 0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/J8oNDusqYy
  • #DAX: Currently the market is trying to push beyond the reversal-day high, but if it does the December t-line and a minor swing-high from July 2018 stand in a way of a further advance. Get your DAX technical analysis from @PaulRobinsonFX here: https://t.co/1Yus7TddGo https://t.co/jiwN6z3TFB
  • #AUD and #NZD are modestly lower while #CHF and #JPY are modestly higher, suggesting market sentiment is favoring a risk-off tilt
  • The British Pound may be at risk of losing upside momentum against the US Dollar and Japanese Yen as #Brexit limbo fuels a shift in $GBPUSD and $GBPJPY contrarian trading outlooks. Get your market update from @ddubrovskyFX here: https://t.co/hHcAFEzO3X https://t.co/24vKxDohDI
Stock Market October Forecast: Prepare for Volatility

Stock Market October Forecast: Prepare for Volatility

2019-10-01 19:30:00
Peter Hanks, Junior Analyst
Share:

Stock Market Watchlist:

  • Historically, October is the most volatile month for US stocks with an average VIX of 21.7 since 1990
  • Last year’s equity rout could see investors tread cautiously as they look to avoid a similar fate
  • The market and fundamental conditions could threaten the stock market’s stellar return in the year-to-date

Stock Market October Forecast: Prepare for Volatility

The S&P 500, Dow Jones and Nasdaq 100 are poised for an above-average annual return in 2019, but time remains yet. As the Summer months fade and the calendar ticks into October, market participants will have to weather a month which has historically been the most volatile. Since 1990, October’s average VIX reading has been a lofty 21.7, high enough to beat out neighboring September and November which boast readings of 20.2 and 20.5 respectively. Therefore, if history is any indication, the market may be headed for another period wild price fluctuations.

Average Vix by Month (1990-2019)

Source: Bloomberg

Alongside heightened volatility, October enjoys the second-highest volume on average. Trailing January alone, an average of 816 million shares of the S&P 500 are exchanged each every day of October – compared to an average of 825 million in January. Despite the increased volatility, the S&P 500 has climbed 1.46% on average during October since 1990. While the longer-term view paints an encouraging picture, some investors may be wary of the month ahead after last year’s rout.

S&P 500 Volume and Volatitlity

Source: Bloomberg

To that end, October 2018 saw the S&P 500 drop roughly -7.25% as trade wars and global growth concerns weighed on the outlook for equities. At the time, the Federal Reserve had not delivered its dovish pivot, so forecasts were becoming increasingly bearish as monetary policy looks to constrict further on tepid growth.

With that in mind, past performance is in no way a predictor of future results and both the fundamental and technical landscapes are vastly different than a year ago. Still, the first day of October saw an immediate uptick in the VIX after a contraction in manufacturing PMI data put investors on edge. Therefore, it may be prudent for investors to be appropriately positioned for October’s historical conditions – even if they fall short of last year’s rout. In the meantime, follow @PeterHanksFX on Twitter for further updates and analysis.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more:S&P 500 Outlook: IPO Market Hints at Gradual Shift in Risk Appetite

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.