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.
Contributor
Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
SPY in upward trend: price rose above 50-day moving average on September 11, 2026
SPY moved above its 50-day moving average on September 11, 2026 date and that indicates a change from a downward trend to an upward trend. In 35 of 40 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 88%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a +1.49% 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in 303 of 362 cases, the price rose further within the following month. The odds of a continued upward trend are 84%.
SPY may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The 10-day RSI Indicator for SPY moved out of overbought territory on August 14, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 47 similar instances where the indicator moved out of overbought territory. In 35 of the 47 cases, the stock moved lower in the following days. This puts the odds of a move lower at 74%.
The Momentum Indicator moved below the 0 level on September 09, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on SPY as a result. In 54 of 76 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 71%.
The Moving Average Convergence Divergence Histogram (MACD) for SPY turned negative on August 20, 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 52 similar instances when the indicator turned negative. In 38 of the 52 cases the stock turned lower in the days that followed. This puts the odds of success at 73%.
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 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
The Aroon Indicator for SPY entered a downward trend on September 11, 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.
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