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Octoberphobia Returns: Can the Market Overcome Seasonal Jitters?
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Our View
The ES traded up to 6802.75 on Globex and opened the regular session at 6797.25. After the open, the ES traded 6801.75—and that was all she wrote. It then sold off down to 6747.25 at 11:54, bounced up to 6759.00, retested the low, and rallied to 6766.00 at 12:40. From there, it climbed to two lower highs at 6764.50 and 6762.75, then dropped to 6748.50 at 2:07. It slowly climbed back to 6761.50 by 3:40.
The ES traded 6769 as the 3:50 cash imbalance showed $1.2 billion to buy, held in that area into the 4:00 cash close, and ultimately settled at 6765 on the 5:00 futures close—down 24.5 points.
The NQ settled at 25,039.25, closing down 145.5 points or -0.58% on the day.
In the end, the question of the day is: why did the ES and NQ fall? Gold hit $4000, and a report revealed Oracle’s cloud computing profit margins are lower than expected, dragging down tech giants. Nvidia and other “Magnificent 7” stocks fell 1–2%. Meanwhile, the U.S. federal government shutdown, now in its second week, is costing $15 billion in GDP per week and has furloughed 750,000 workers. It also delayed the September jobs report. Treasury yields ticked up slightly (2-year +1 bp, 30-year +1.7 bp), pressuring growth stocks.
In terms of the ES and NQ’s overall tone, the gap used up all the early buying power, and the Oracle news weighed heavily on the tech sector. As for overall trade, volume was higher at 1.373 million contracts traded.
On Tap
As long as the government remains shut down, there will be no economic reports. In terms of Fed speak, there are five speakers on the docket:
Time
Event
Speaker/Description
9:20 AM
Opening Remarks
St. Louis Fed President Alberto Musalem
9:30 AM
Speech
Federal Reserve Governor Michael Barr
2:00 PM
Release of Minutes
Fed’s September FOMC Meeting
3:15 PM
Speech
Minneapolis Fed President Neel Kashkari
5:45 PM
Speech
Federal Reserve Governor Michael Barr
7:15 PM
Speech
Chicago Fed President Austan Goolsbee
I think it’s important to remember how fluid things have become. There’s no doubt the Fed is supporting the markets, and cash that had moved out of the U.S. to Europe is starting to flow back in. But everything feels fragile, and the government shutdown only adds to the already high level of uncertainty. I don’t pretend to know it all, but our politicians are totally worthless and had better get their act together soon.
Our View
Oracle dropped 2.5% after news that the company lost $100 million last quarter. Nvidia also fell, while ADM jumped 3.8%, and Ford dropped over 6%. It might seem like business as usual, but it’s not exactly.
As the index markets reversed, gold traded up to a new all-time contract high at $4,014.60. Silver also traded up to a new high at $48.550, nearing its 1980 highs before dropping nearly 2%. The BTZ25 Bitcoin futures traded up to $127.270, while the dollar climbed for the second day in a row, up 0.84%.
While we did get a down day, the rate-cut craze hasn’t let up. According to the CME’s Fed futures, the benchmark short-term rate—now just above 4%—is expected to fall just below 3% by the end of next year. That’s slightly below the Fed’s forecast, and odds remain high for October 29th and December 11th rate cuts.
Clearly, there are risks to the labor market, and the Fed’s dot plot suggests rates will continue lower into 2026.
Our Lean
The ES and NQ have been up 6 of the last 8 sessions. As I said before: sell the early rallies and look for the double pump—and that was the whole ball of wax. I also said to buy the pullbacks, but Oracle’s weakness kept a lid on the Nasdaq.
I think everyone understands that the longer this shutdown lasts, the more likely rgw markets weaken, as prolonged gridlock risks broader fallout. Both parties need to start thinking about the good of the nation, not just their own agendas, but what do I know?
Our lean: Like every time we make a new high and pull back, the same people who were calling for a top two months ago are still calling for one. I don’t doubt that the ES and NQ can go lower. If you go back to last Monday’s shutdown, the ES settled at 6761.50, and since then, it’s been up one day, down the next. It’s made a few more highs, but we’re basically back to square one.
As always, I think we could see a rally, but there’s good resistance at the 6800, 6810, and 6820 levels. Support is at 6750–6755, 6730, 6718, 6705, 6697, and 6690.
Stock Trader’s Almanac: October 2025 – Beware Octoberphobia, But Don’t Panic
Ah, October – the month that has haunted stock traders since the Roaring Twenties. Coined “Octoberphobia,” this seasonal dread stems from a string of infamous market meltdowns: the 1929 Crash that kicked off the Great Depression, Black Monday in 1987 (when the Dow plunged 22.6% in a single day), and echoes of turmoil in 1907, 1974, and even 2008.
The “October Effect” suggests stocks are prone to declines this month, fueled by end-of-quarter selling, tax-loss harvesting, and plain old superstition. But here’s the twist: history shows October often rebounds stronger than it starts, with an average S&P 500 return of +1.4% since 1950—making it one of the market’s better months overall.
For 2025, a post-election year, the Stock Trader’s Almanac paints a sunnier picture. Jeffrey Hirsch, editor-in-chief, forecasts a “monster Q4 rally” targeting S&P 7100 by year-end, with October described as “Usually Fair.” In non-election cycles like this one, the month has delivered positive returns 70% of the time since 1950, averaging +0.8%.
Vital stats from the Almanac highlight early-month strength: the first five trading days often set the tone, with gains in 62% of post-election Octobers. Strategies? Lean into the “October Barometer”: If the S&P rises in the first week, it typically climbs 1.5% for the full month. A dip, and it’s a flat zero.
Guest Posts — Polaris Trading Group
S&P 500 (ES)
Prior Session was Cycle Day 1: Tuesday delivered a textbook Cycle Day 1 decline, fulfilling the average decline target at 6760 with near surgical precision.
The morning session opened firm but quickly revealed the tell-tale CD1 pattern— early bid strength failing near the ONH, then a swift rotation lower as sellers absorbed liquidity around the D-Level. Manny and PTGDavid were in full sync, calling the developing PKB Short Structure as the pivotal setup of the day.
Range was 55 handles on 1.371M contracts exchanged
For greater detail of how this day unfolded, click on the Trading Room RECAP 10.7.25 link.
…Transition from Cycle Day 1 to Cycle Day 2
Transition into Cycle Day 2: Normally for CD2 we are anticipating some consolidation MATD rhythms to begin the session.
Cycle Day 1 Low was established @ 6747.25, which will be used as the benchmark for this cycle’s performance.
Bulls continue to BTFD as the core support structure remains intact. Bears have yet to find a sustained session where they can carry-over control.
End of Day MOC Buy Imbalances disrupt the bear plan and force shorts to cover into the closing bell.
Note: Although selling continues to get absorbed forcing shorts to cover, there will come a time when the dip gets sold and sold hard, like “elevator down” hard. So always remain flexible and never get trapped into a one-sided view. Be like a Jellyfish and “Go With The Flow!”
Of course, nothing changes for PTG…Simply follow your plan. Take only Triple A setups and manage the $risk. ALWAYS HAVE HARD STOP-LOSSES in-place on the exchange.
PTG’s Primary Directive (PD) is to ALWAYS STAY IN ALIGNMENT with the DOMINANT FORCE.
As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 6750+-, initially targets 6770 – 6775 zone.
Bear Scenario: Price sustains an offer below 6750+-, initially targets 6740 – 6730-25 zone.
PVA High Edge = 6770 PVA Low Edge = 6748 Prior POC = 6758
ESZ
Thanks for reading, PTGDavid
MiM and Daily Recap
Intraday Recap
Intraday Recap
The ES opened the overnight Globex session at 6789.50 and initially drifted lower to 6775.25 by 8:50 PM before recovering modestly. It posted a minor lower high at 6786.00 around midnight and then softened again, printing 6775.75 at 2:30 AM. The final Globex leg saw a small dip to 6774.00 at 4:30 AM before a premarket rally that lifted the contract to a session high of 6802.75 at 9:00 AM, a gain of 28.75 points from the early morning low.
The regular session opened at 6797.25, but the bid quickly faded. Sellers took control, pushing the ES steadily lower through the morning. By 11:50 AM, it hit the intraday low of 6747.25, down 50 points from the open. From there, a modest recovery attempt brought prices up to 6766.25 at 12:35 PM, but the bounce stalled, forming a lower high. A shallow pullback to 6748.50 at 2:00 PM produced a higher low, followed by another small push up to 6766.00 at 3:00 PM. The tone remained defensive into the final hour, with the ES hovering in the mid-6760s through the close.
The futures settled at 6765.00 on the 5:00 PM cleanup print, down 23.50 points or -0.36% on the full session. The regular-session close at 6762.50 reflected a 34.75-point drop (-0.51%) from the 9:30 AM open and a 26-point loss (-0.38%) versus the prior cash close. Volume reached 1.37M contracts, with 1.18M trading during the cash session.
Market Tone & Notable Factors
Tuesday’s action carried a distinctly risk-off tone after seven consecutive up days for the S&P and Nasdaq. Sellers controlled most of the regular session, though downside momentum remained measured. The market found two-way trade in the afternoon but lacked strong follow-through on rebounds.
The MOC imbalance data showed a $1.42B buy imbalance, with 70% of total dollars and 61% of symbols skewed to the buy side—enough to soften the late-day selling but not to reverse the broader decline. Sector flows were mixed: healthcare, real estate, and technology led on the buy side, while industrials, consumer cyclicals, and financials showed persistent selling. Oracle’s large negative imbalance (-$24.6M) and weakness in software names weighed on the tech complex, while healthcare and REITs (WELL, CLH, MSTR, and WMT) saw positive inflows.
Overall, the ES experienced controlled selling throughout the session, digesting recent highs after a strong multi-day run. The tone was mildly bearish but orderly, with buyers re-emerging on weakness and a strong MOC bid hinting at underlying dip demand. Heading into Wednesday’s FOMC minutes release, traders will be watching whether the recent pullback broadens or stabilizes near the 6740–6760 support zone.
Technical Edge
Fair Values for October 8, 2025:
-
SP: 46.53
-
NQ: 199.32
-
Dow: 254.31
Daily Market Recap 📊
For Tuesday, October 7, 2025
• NYSE Breadth: 31% Upside Volume
• Nasdaq Breadth: 45% Upside Volume
• Total Breadth: 43% Upside Volume
• NYSE Advance/Decline: 32% Advance
• Nasdaq Advance/Decline: 34% Advance
• Total Advance/Decline: 33% Advance
• NYSE New Highs/New Lows: 127 / 52
• Nasdaq New Highs/New Lows: 274 / 87
• NYSE TRIN: 1.05
• Nasdaq TRIN: 0.58
Weekly Market 📈
For the week ending Friday, October 3, 2025
• NYSE Breadth: 55% Upside Volume
• Nasdaq Breadth: 63% Upside Volume
• Total Breadth: 60% Upside Volume
• NYSE Advance/Decline: 56% Advance
• Nasdaq Advance/Decline: 60% Advance
• Total Advance/Decline: 59% Advance
• NYSE New Highs/New Lows: 315 / 91
• Nasdaq New Highs/New Lows: 748 / 238
• NYSE TRIN: 0.99
• Nasdaq TRIN: 0.88
ES Levels
The bull/bear line for the ES is at 6767. This is the key level that must be reclaimed for bullish momentum to resume. Above this level, buyers can look for continuation plays on dips.
Currently, ES is trading around 6772.50, showing an early attempt to stay above the bull/bear line. Holding above 6767 keeps short-term sentiment positive, with upside targets at 6789.50 (minor resistance) and 6796.50, which is the upper range target. A sustained break above 6796.50 opens the door to 6802.75 and 6824.25.
On the downside, if the ES slips back below 6767, sellers will likely test 6747.25 and 6737.50, our lower range target for today. A break below 6737.50 could extend the decline toward 6709.75.
Overall, bias remains neutral to bullish above 6767. Failure to hold that level would turn the tone bearish for the session.
NQ Levels
The bull/bear line for the NQ is at 25,075.50. This is the key level that must be reclaimed for bullish momentum to resume. Above this level, traders can look for continuation buying and potential tests of higher resistance zones.
Currently, NQ is trading around 25,080.75, holding just above the bull/bear line in the Globex session. If price can maintain strength above 25,075.50, the next upside target is the upper range resistance at 25,246.75. Beyond that, a move toward 25,408 and possibly 25,513.25 is possible if momentum extends.
If the market slips back below 25,075.50, downside pressure may return, targeting 24,984.75 and 24,904.25 as the lower range supports for today. A break below those levels could expose 24,743 as the next key support.
In summary, the short-term tone remains balanced-to-bullish as long as NQ holds above 25,075.50. A sustained move below this level would shift control back to the sellers, while strength above 25,184.50 and 25,246.75 would confirm bullish control heading into the cash session.
Calendars
Economic
Today
Important Upcoming / Recent
Earnings
Upcoming
Recent
Trading Room Summaries
Polaris Trading Group Summary – Tuesday, October 7, 2025
Tuesday was a textbook Cycle Day 1 (CD1) decline that fulfilled multiple key downside targets with high precision. The room leaned bearish early and followed through with excellent structure-based short setups, guided by both statistical probabilities and order flow.
Key Trades & Wins:
-
Manny’s Short Entry @ 6797.75 → +5
Early morning trade that capitalized on seller absorption and a reversal signal, setting the tone for the session. -
Manny’s Short @ 6775 → +22
Textbook execution based on statistical logic (96% ONH/ONL tag probability). Once ONH failed, the shift to ONL targeting became high probability. This trade nailed the move down to ONL and beyond. -
PTGDavid: Short Structure PKB Play
Price broke down from prior key levels (especially 6780), and David emphasized the strength of the bearish structure developing—this led to the official CD1 decline. -
CD1 Target Fulfilled: 6760
The average CD1 decline was hit precisely, with price later violating additional downside levels (6751.25 and 6746.50). These were all anticipated ahead of time by the team. -
Late Day Short (A10 Close Play)
David floated a short into the close. While the MOC came in as a $1.2B BUY, the price action was sluggish and unable to generate a strong upward move—validating the idea of trapped longs and resistance holding firm.
Technical Highlights & Lessons:
-
ONH/ONL Tag Probability: 96% Rule in Play
Manny highlighted this key stat early. When ONH was not even tested, the probability of ONL being tagged became the focus. This was a major lesson in statistics-driven trading discipline. -
S3H / CD1 Pattern Recognition
Manny and David repeatedly noted how the action mirrored previous CD1 setups—early weakness, continuation selling, and precise support zone hits. Excellent lesson on pattern repetition and cycle awareness. -
Tempo Reading
Manny emphasized learning the difference in tempo between genuine selling and buyable retracements. This is crucial in differentiating a real trend from chop. -
Gamma and Options Flow Insight
Multiple notes throughout the day on SPX gamma positioning, charm decay, and 0DTE put zones helped guide expectations for weakness and bounces. -
Afternoon Observations
Despite resilient behavior in price (bounces on dips), both Manny and David noted the market’s failure to regain lost levels like 6765. Manny’s commentary about afternoon rallies and Globex pops on similar days was insightful for future prep.
Takeaways & Mindset:
-
“It’s about the process, not the result.”
The early YUMI Wisdom post set the tone for the day, reminding traders to journal and reflect before knowing the outcome. That mindset shined —planning, probabilities, and process dominated. -
No Need to Chase Longs in a Bear-Controlled Market
David’s repeated reminders (“No reason to be playing long side”) were spot-on and reinforced the discipline of trading with structure and flow, not against it. -
Celebrate the Wins, Stay Flat When Needed
Manny opted to stay flat in the afternoon, “enjoying the win,” showing restraint and emotional control—a solid example for others.
Closing Thoughts:
-
The Cycle Day 1 short scenario played out beautifully from start to finish.
-
Bearish structure was well defined, supported by statistical edges and strong trader discipline.
-
Excellent teamwork, sharing of insight (especially from Manny and David), and lots of learning moments throughout the day.
Lesson of the Day:
Trade the structure, respect the probabilities, and let the process lead you to the outcome.
Discovery Trading Group Room Preview – Wednesday, October 8, 2025
-
FOMC Minutes Today: All eyes on the Fed with minutes due at 2:00pm ET. Analysts will be parsing for signs of division and rate cut outlooks, especially as the government shutdown hampers key economic data.
-
Markets Dip: Tuesday ended a 7-day win streak for the S&P 500 and Nasdaq amid concerns over Oracle’s cloud margins and AI trade sentiment.
-
Government Shutdown – Day 7: The White House ramps up pressure, freezing Democratic-state projects and threatening no back pay for furloughed workers. Tensions escalate as the Budget Office signals pay isn’t guaranteed.
-
Gold Soars: Gold has surged past $4000/oz, up 50% YTD, driven by global uncertainty and central bank demand. Dalio and Griffin highlight gold’s safe haven status over the dollar. Silver eyes its 2011 high.
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xAI Raises $20B+: Elon Musk’s xAI secures major funding via an innovative Nvidia GPU-backed deal to support its Colossus 2 data center.
-
Oil Data & Fed Speakers: Despite the shutdown, crude inventories are scheduled for 10:30am ET. A full slate of Fed speakers is on tap throughout the day.
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Volatility & ES Levels: Volatility spiked with the recent selloff. ES average range now 53 points. Whale bias is bearish pre-US open. ES trades below trendline resistance at 6827/32s; support eyed at 6672/75s.
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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!
This post goes out as an email to our subscribers every day and is posted for free here around 2 PM ET. To get your real-time copy, sign up for the free or premium version here: Opening Print Subscribe.
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