October Market Outlook: Volatility, Opportunities in Bonds, Oil, and Tesla

October: the month of volatility and opportunities in financial markets

October is here, and as expected, volatility takes the stage. The uncertainty in the markets is at an all-time high, but hey, that’s not necessarily a bad thing. For those who know how to navigate these choppy waters, there are great opportunities to be found.

On one hand, inflation is still giving the Fed a headache, with the labour market constantly in its sights. On the other hand, crude oil can’t make up its mind. Tensions in the Middle East are driving prices up in the short term, but at the same time, forecasts of an oil surplus in the coming months are pushing prices down in the medium term. It’s a volatile cocktail, but perfect for those who know how and when to act.

Meanwhile, the S&P and Nasdaq were on a good run, but their momentum has stalled, waiting for employment and inflation data to come out this month. This uncertainty is also impacting the bond market, which has pulled back while yields are starting to recover.

And as if that wasn’t enough, the big surprise comes from China, with an impressive 30% rally in indexes like the MCHI in just 10 days, thanks to some Chinese government measures that we’ll break down later.

With all this going on, there are opportunities for those bold enough to make a move. Are you ready?

Taking advantage of market uncertainty: bonds, oil, and Tesla in the spotlight

As we mentioned in our weekly roundup, the markets are in a relatively positive but uncertain situation. In other words, no need to panic, but there are tensions on several fronts.

Uncertainty is always the perfect playground for those who know how to move smartly, so it’s time to seize some opportunities.

We already hinted at this in our previous post: bonds, oil, and Tesla are three key assets that could offer excellent swing trading opportunities this October.

US Bonds: a calculated risk worth taking

US bonds are looking particularly attractive, with the TLT ETF hovering around $97. If the upcoming employment data is solid, we could see a 2% drop. But if the results are weaker than expected, bonds could shoot up, with a potential 6% increase from current levels.

Buying at $97 comes with some risk, but considering rate cuts are expected in the coming months, it’s a calculated risk that could pay off in the short term. A safer strategy is to wait and see if the price hits $95 before going long.

Plus, after the employment data, the market will shift its focus to inflation, which is expected to be moderate, further strengthening the bullish trend in bonds.

Tesla: when promises aren’t kept

Tesla has taken a 5% hit today after reporting slightly lower vehicle sales than expected. As we mentioned in our previous summary, Tesla tends to overestimate its expectations, leaving it vulnerable to drops when it doesn’t deliver on its promises. And that’s exactly what we’re seeing now.

Next week, they have a big event with the unveiling of the robotaxi, but let’s be honest, it doesn’t seem like it’s going to blow anyone’s mind. If the shares fall back to $260, it could be an interesting opportunity to go short.

However, after today’s drop, that bet seems a bit less appealing. We’ll see how things play out throughout the week.

Oil: patience for a better entry

Oil has shown mixed signals. We previously mentioned that any upward bounce in price could be a good opportunity to go short. However, the rising tensions in the Middle East and the price of WTI still hovering in neutral territory ($71) create short-term uncertainty. A prudent strategy would be to wait for a sharper rise towards $76-$79 before making a safer short entry.

Don’t worry, we’ll be publishing a detailed analysis on the oil market soon so you can better understand its dynamics and take advantage of the inefficiencies.

China: explosive rally, but… is it sustainable?

The unexpected rally in the Chinese market has caught many by surprise, with an over 30% rise in two weeks. Here at Breaking Bucks, we had already mentioned that the Chinese market was undervalued, but the speed of this rebound urges us to be cautious.

The MCHI index is currently at $55.5, with strong resistance between $56.4 and $57. It wouldn’t surprise me to see a pullback to $53 or even lower, given the unpredictable behaviour of this market after such rapid rises.

It’s an attractive opportunity, but not without risks. We’ll be publishing a detailed analysis on China and its financial markets soon.

Upcoming market analyses and strategies

There’s still plenty to unpack about these four markets. So, if you don’t want to miss out on our upcoming strategies and analyses, make sure to follow Breaking Bucks on social media.

In our most recent report on the luxury industry, we already pointed out opportunities in companies like Burberry and Hermès, which have since gone up by 15%. Don’t say we didn’t warn you!

In the coming days, we’ll also be publishing a deep dive into the oil market, to help you capitalise on the opportunities that are still on the horizon.

For those just starting out or without enough capital to apply their strategies, Darwinex Zero offers the perfect conditions to hone your trading skills. With the code DWZ2312975MGM, you’ll get 25% off registration. You can also follow my profile on Darwinex Zero to monitor the performance of our strategies discussed here: FTZE. Don’t forget to follow us on all our social networks to stay up to date on the best opportunities!

To start investing, you can use any platform or broker, as long as it’s safe and regulated. I’ll leave a link to the one I started with, Trading 212. It’s intuitive, easy to use, and regulated in Europe, offering protection for your assets. It has multiple offers on diversified ETFs and is definitely one of the best investment platforms out there.