Ten percent-plus unemployment be damned, the S&P500 (SPY) finished the week up +3.4% for its first positive performance in a number of weeks. While the back-to-back plus days last week were most impressive, several indices are already beginning to look overstretched to the upside.

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October finally put a halt in the road for equities' historic seven-month run off of the March lows, leaving the S&P 500, Dow Jones Industrials and NASDAQ 100 cash indices mixed at -1.98%, +0.00% and -3.02%, respectively. The month also ended with the VIX back in the low thirties for the first time in a while.

With the majority of third quarter earnings entered into the record books, the pullback came on nascent dollar strength, a key rate increase in Australia, higher energy costs and mixed economic reports. Small (IJK) and Mid-Caps (IWS), Financials (XLF) and Materials (XLB) led the retreat, while Energy (XLE) and Consumer Staples (XLP) were able to eek out positive returns. Ten days into the decline, traders in early November will be looking to the FOMC and the monthly jobs report to put the rally back on track.

A volatile week left equities down significantly on mixed economic messages. In fact, the Russell 2000 (IWM) and Emerging Market (EEM) ETFs were down a whopping -6.2% and -7.8% respectively. This type of reintroduction of volatility is generally not solved easily or quickly, and I suspect we may see more choppy performance in the weeks ahead. A quick overview of my current thinking may be found here in Friday's mid-day post.

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Equities held flat last week with the S&P500 (SPY) finishing down -0.7%. Interestingly, more good economic news on Friday was not enough to push the market back higher as Energy and Materials pulled back fairly hard on dollar strength. Intermediate-term technical indications look set to roll over, although it still feels early to make that call as what we've seen so far could still be categorized as choppy consolidation.

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With markets roaring back and the SPY having broken $110

Earnings gyrations and all, the S&P500 (SPY) still managed finished the week higher by another +1.5%. In fact, all of the major sectors were higher with the exception of the Financials (XLF) and Real Estate (IYR), which were just slightly off beat.

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Some personal time over the weekend has this post out late, but I wanted the main graphic up for continuities' sake. Note how short-term overbought we were as of Friday's close not to mention today's gap higher, which is currently threatening to close late into the afternoon session. It should be an interesting trading week as we head into heavy earnings reporting.

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The markets continued their post-September 22nd struggle into difficult economic reports and ahead of third-quarter earnings. In this respect, early October feels much like early July, the difference being quarter-over-quarter results could prove more difficult this time around. The S&P500 (SPY) ended last week down a moderate -1.9%, with only the Consumer Staple (XLP +0.3%), Commodity (DBC +1.6%) and Treasury (TLT +1.4%) complexes posting advances among the tracked ETFs. In any event, equities are looking as short-term oversold now as they looked overbought just a couple of weeks ago.

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Last month I questioned whether equities were "Running on Empty," and perhaps I could pose that very same question this early October after a rash of less than stellar economic reports. Nevertheless, September undeniably put in more healthy returns for the year with the S&P 500, Dow Jones Industrials and NASDAQ 100 cash indices up +3.57%, +2.27% and +5.77%, respectively.

Mid-Caps, Industrials and Technology led the charge, while Health Care and Large-Cap Value stocks lagged somewhat, although clearly all of the tracked indices came out to the positive. After the strongest quarter in decades and third-quarter earnings just ahead, will the bulls good fortune continue to run?

Blue-lined comparison of September versus August FOMC statement. Also see past Fed-Day reactions on this nifty little site. [Click Graphic to Enlarge]

The markets put in another positive performance with the S&P 500 (SPY) closing higher by +2.3%. The Relative Strength Index charts below reflect the virtually unique persistent short-term strength we have been witnessing.

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The markets moved back into bull mode last week with another one of those performances often not seen in a year, let alone four days. In fact, the S&P 500 (SPY) closed higher by another +4.1%. Among the tracked ETFs, only Agriculture (DBA), Twenty-Year Treasuries (TLT), and the US Dollar (UUP) closed lower. Many ETFs still look fairly overbought on a very short-term basis, but Friday's cooling reduced the number of securities in that category, and longer-term strength continues to build.

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In spite of higher markets across the board after Friday's Jobs report showing a higher than expected unemployment rate set against fewer job losses and greater household earnings, U.S. equities finished the week mostly lower with the S&P 500 (SPY) down some -1.3%. In fact, among the tracked ETFs, only Emerging Markets (EEM), Transports (IYT), Consumer Staples (XLP) and Precious Metals (DBP) were spared for the week.

US Equities spent the week going sideways with the S&P 500 (SPY) finishing higher by +0.4%. The largest gainer for the week was Agriculture (DBA +3.2%), while Liquid Fuels suffered a small decline (DBE -1.2%). Speaking of which, DBA, DBP, XLK and IYR continue to look somewhat overbought in spite of last week's pause.

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After a rough start to the week on Asian market weakness, U.S. equities shook off declines for another heady week of gains, with the S&P 500 (SPY) ending higher by another +2.2% for fresh 2009 highs. The largest gainer for the week was Mid-Cap Value stocks (PWP +3.3%), while Agricultural Commodities suffered a mild decline (DBA -1.6%).

Okay -- by request -- here is the Paul Harvey "Rest of the Story" from the equity picture painted Sunday...

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Markets took a breather last week with the S&P500 (SPY) down about forty-one basis points. In fact, only the safety plays, such as Utilities (XLU), Consumer Staples (XLP), and Healthcare (XLV), were able to record slim advances.