Stocks Soared On Friday And For The Week  Image: Bigstock Stocks soared on Friday and for the week. That makes it 3 up weeks in a row for the Dow, and 2 up weeks (not in a row) out of the last 3 weeks for the S&P, Nasdaq, and Russell 2000. This rally began with the previous week's key upside reversal on Thursday, 10/13. Since that day's low, the Dow is up 8.45%, the S&P is up 7.48%, the Nasdaq is up 7.64%, and the Russell 2000 is up 6.11%. A key reversal is a rare pattern. It's also considered a reliable pattern. How high stocks go remains to be seen. Is this a temporary bottom we've seen or THE bottom? Either way, with so many positives in the economy and the market right now (strong jobs market, increasing GDP, strong earnings season, and Q4 historically being a strong quarter for stocks, especially during midterm years), there's plenty of reason for stocks to keep going higher. Earnings season ramps up this week with 1,015 companies set to report. That climbs to 1,615 next week. In less than a week and a half, the Fed will meet again, with the FOMC announcement on rates coming on Wednesday, November 2. At the moment, there's a nearly 98% chance that they raise rates by another 75 basis points, which would put the midpoint for the Fed Funds rate at 3.88%. They are then expected to raise again in December by another 50 basis points, which would equal the 4.40% target they set for year's end. But nothing is set in stone. So all eyes will be on the Fed on 11/2. In the meantime, after the previous week's key reversal day, and follow-through buying last week, many are speculating that we just may have turned the corner on stocks. If so, we could see stocks playing quite a bit of catch-up after being so oversold and undervalued following three solid quarters of selling. And that would be a fantastic way to end the year. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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