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 +1.23% Uptrend, growing for three consecutive days on October 06, 2026
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where SPY advanced for three days, in 301 of 362 cases, the price rose further within the following month. The odds of a continued upward trend are 83%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on September 21, 2026. You may want to consider a long position or call options on SPY as a result. In 62 of 76 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 82%.
The Moving Average Convergence Divergence (MACD) for SPY just turned positive on October 02, 2026. Looking at past instances where SPY's MACD turned positive, the stock continued to rise in 42 of 52 cases over the following month. The odds of a continued upward trend are 81%.
SPY moved above its 50-day moving average on September 17, 2026 date and that indicates a change from a downward trend to an upward trend.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
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 76%.
SPY broke above its upper Bollinger Band on October 06, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for SPY entered a downward trend on September 21, 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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