R.C. Market Report 10.20

• Market Trend: Neutral

• We had a nice price action to the upside today. It was far more than I had imagined. But low volume is a cause for concern and that prevented me from hurrying to get out of my shorts. In the next couple of days, we may have final bits of selling before we head higher for an extended period.

• While the market was up 400 pts, there were stocks with sizeable moves up and down. I'd interpret it as base forming trading, where we see a scramble for order to see who'll lead and who'll lag on the way up. I don't see the market or any group of stocks confirming a move out of the gate just yet. But it looks to me like, natural gas stocks look poised to lead out.

• VIX dropped noticeably today and that's a very good sign for the bulls. Today marked the first closing lower low for the VIX since back in late August. Simon's call for a double top in VIX is looking good so far.