Keep an Eye on Consumer Confidence This Week
The Conference Board is set to release the Consumer Confidence Index for October on Tuesday. The index has been surging higher in recent months and the September reading was 138.4. That is the highest reading since September 2000.
The Consumer Confidence Index can potentially be used as a contrarian indicator for the overall market. Historically, the highest readings have come at market tops and the lowest readings have come at market bottoms.
High readings themselves haven’t necessarily been a signal of an impending bear market, however. From 1997-2000, the index was above the 125 level and the market continued to move higher. However, when the index fell by more than 10% from its peak is when things started getting bad.
With the recent peak reading of 138.4, the index would need to drop down to 124.6 in order to represent a 10% decline. The index may not drop that far in one month, but with the tremendous selloff we have seen in stocks recently, it could happen.
Obviously, you can’t trade the Consumer Confidence Index directly, but investors may want to consider taking defensive actions to protect their portfolios, in my view. One way to do that would be to buy long-term put options on an index ETF like the SPDR S&P 500 ETF (NYSE: SPY), or an investor could buy an inverse index ETF like the ProShares Short S&P 500 ETF (NYSE: SH). To note, these are not my recommendations and these tickers should not constitute investment advice.
Either of these actions could potentially help hedge a portfolio against an overall market correction. The amount allocated to a hedge should be determined by the construction of the portfolio. The greater the allocation to equities, the bigger the hedge will need to be in order to be effective.
Investors should also consider the makeup of their equity portfolio in order to choose the index to hedge. If the portfolio is heavily weighted with tech and healthcare stocks, the Invesco QQQ Trust (Nasdaq: QQQ) would potentially be a better ETF to buy puts on versus the Spyders. Or the ProShares Short QQQ (NYSE: PSQ) could potentially be a better inverse ETF to buy, in my view.
The market has been shaky for the past month and hopefully investors have been able to navigate the volatility in their portfolio, or to remain patient if you're long-term oriented. The Consumer Confidence Index is just one indicator that can be used to judge the sentiment toward the market and can help investors chart a course of actions to take.
SPY in downward trend: price dove below 50-day moving average on July 23, 2026
SPY moved below its 50-day moving average on July 23, 2026 date and that indicates a change from an upward trend to a downward trend. In of 37 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on July 23, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on SPY as a result. In of 73 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for SPY turned negative on July 17, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 51 similar instances when the indicator turned negative. In of the 51 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for SPY entered a downward trend on July 08, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in of 367 cases, the price rose further within the following month. The odds of a continued upward trend are .
SPY may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
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