Audrey Deschenes
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Audrey Deschenes in Trading. Let's get it started!,

Why the S&P may already be in a bear market

Critical intelligence before the U.S. market opens

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The moment they knew they were cooked.

Remember the third quarter? As a refresher: It was nasty. Nastier than a Matt Harvey slider (pre-9th inning). The worst quarter in four years. The market seemed to have finally surrendered itself to the bears. A rebound didn’t appear to be in the offing, either. Then October happened, and it was scary good.

The best month in four years quickly erased the memory of the dog days, with a 9% pop on the major indexes. Earnings have given investors a nice little boost, as beats have resulted in those stocks rising by an average of 2.2% in the surrounding four-day period, according to some CNBC number-crunching. That doubles the 1.1% advance a positive surprise typically delivers. At the same time, earnings disappointments haven’t been punished as much as they usually are.

Now we move to November, where big results from big names like DisneyDIS, -1.98% and Facebook FB, +4.10% will have a chance to keep the bullish earnings trend intact — at least until Friday, when the stock market will have to absorb the latest jobs tally.

“For reasonable equity market returns to be achieved over the next twelve months, a lot will hinge on earnings growth in the fourth quarter and first half of 2016,” said David Templeton of the Horan Capital Advisors blog, who is skeptical on the short run, but bullish on the long run. “At worst, the currency headwind should lessen and the consumer should benefit from lower energy prices.”

Speaking of currency, our call of the day says the dollar’s relationship with the S&P is sending off a bright yellow warning light right (more on that below). Then again, using the vaunted “Mets Indicator,” investors are likely screwed, regardless:

marketwatch.com