October: Continue Rally or Pullback ?

We are entering the 4th quarter in lack of confident. The JCI was opened in red but it managed to close in slightly positive, up only 0.08%. The unemployment report in the US showed a new record low since 1983 with 9.8% unemployment rate.

In my observation, I noticed that there were some re-balancing portfolio activities in the market lately. Fund managers and foreign investors are tend to shift their portfolio into a lower beta stocks. It could be seen as a sign that the market might be in a higher volatility in a near term. Investors are trying to enhance their portfolio so that their portfolio risk would be lower.

With this risk aversion condition, I am expecting the market in a ranging trade with tendency to go down a little bit in this month of October.

(Source: Dongsuh Securities, edited)

The trading range would be in 2400 - 2500 level or if the market go down further beyond the 2400 level support it would test the 2300 level.

You could check my portfolio here : http://deroncapital.wordpress.com/