Happy Halloween, traders…

We have our answer.

For the past two weeks, the stock market has chopped sideways. Volatility spiked. Ranges tightened. We saw the biggest single-day sell-off since April.

But when stocks chop around long enough, they eventually break out above or break down below the range. 

You don’t “guess” which way it’ll go. You don’t try to “predict” what will happen…

You wait for the market to show you. 

And this week, the market showed us. 

Stocks broke out to new all-time highs:

If you’ve been patient, you’re now positioned for what could be a significant leg higher into year-end.

The VIX is back near 16. Support levels are holding. And the catalysts driving this move are still developing. 

But this breakout didn’t happen in a vacuum. Three major bullish catalysts converged this week.

And if you aren’t aware of why sentiment is shifting, you’ll probably miss some huge trading opportunities. 

Here’s Why The Market Surged This Week.

The 2-Week Chop That Set This Up

The past two weeks were brutal. The market whipsawed traders with violent intraday swings. One day up 1%, the next day down 1.5%. 

The VIX spiked above 20, signaling elevated fear and uncertainty.

We experienced the biggest sell-off since April. Plenty of traders panicked. They sold positions, tightened stops, and moved to cash, thinking a deeper correction was coming.

I was watching something different: the market wasn’t breaking down. It was consolidating. 

The SPY held key support levels. Each selloff was met with buying pressure. The range was tightening, not expanding.

When markets chop like that, they’re building energy. Think of it like a coiled spring. The longer the consolidation, the more explosive the eventual move (in either direction).

This week, we got the direction. Stocks broke above resistance and hit new all-time highs. 

But why?

3 Catalysts That Triggered The Breakout

U.S.-China Trade Optimism

Markets responded positively to signs of progress in trade talks between the U.S. and China. Hopes that tariffs might be paused or reduced boosted investor sentiment across the board. 

Trade uncertainty has been weighing on markets for months, and any progress—even incremental—removes a major risk factor.

When geopolitical risk decreases, capital flows back into equities. That’s exactly what happened this week.

The Fed Cut Rates To A 3-Year Low

The Federal Reserve lowered its benchmark federal funds rate by 25 basis points to a range of 3.75%-4.00% — the lowest rates in three years.

Lower rates make borrowing cheaper for companies and consumers. They support economic growth. And they make stocks more attractive relative to bonds. 

Couple rate cuts with strong earnings, and you’ve got a recipe for serious bullishness. 

The market had priced in this cut, but confirmation matters. Now we have clarity: the Fed is easing, liquidity is increasing, and the path forward favors risk-on assets.

Big Tech Earnings Beats

Big tech has mostly delivered strong results this week. Alphabet Inc. (NASDAQ: GOOGL) and Microsoft Corporation (NASDAQ: MSFT) both beat expectations, showing that AI investments are translating into revenue growth and margin expansion.

The broader trend remains intact: tech is leading this market higher, and AI momentum continues to drive valuations.

And speaking of earnings…

My Earnings Edge system recently delivered 100 winning trade alerts in a row.*

Stop throwing darts … and start trading earnings setups without guessing.

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What This Means For Your Trading

The market just answered the question everyone was asking two weeks ago. The consolidation broke higher, not lower. 

We’re near all-time highs with three major tailwinds supporting the move.

But that creates a new risk…

When all the news sounds bullish and the charts look amazing, that’s usually when stocks start approaching overextended territory.

We might need a few sideways or small red days (like yesterday) to cool things off. We just had the big run. Now we need to watch for the consolidation.

Don’t chase stocks that have already ripped 5-10% in three days. 

Wait. Be patient…

Happy trading,

Ben Sturgill

*Past performance does not indicate future results. Not typical.