EB Daily Market Report - Tuesday, October 21, 2025
Executive Summary
- Futures were mixed overnight, but the Dow Jones ($INDU, +0.62%) has emerged as today's big winner among the major indices
- Earnings are driving the Dow Jones as 3M (MMM, +6.34%) and Coca-Cola (KO, +3.83%) both reported earnings ahead of expectations
- The 11 highest market cap companies reporting results this morning reported earnings ahead of expectations
- Meanwhile, the 10-year treasury yield ($TNX) is down 2 basis points to 3.96%, marking the 3rd day of the last 4 where the TNX is below 4.00%
- Many commodities are getting crushed today, with silver ($SILVER, -7.04%) and gold ($GOLD, -5.37%) leading the charge
- On a related note, the U.S. Dollar (UUP, +0.32%) is up against most foreign currencies.
- The Volatility Index ($VIX, -3.68%), which surged to nearly 29 on Friday, has fallen back to 17.56 at last check
- Aggressive sectors are performing well again as consumer discretionary (XLY, +1.43%) regains strength
- Consumer staples (XLP, -0.53%) is among the worst-performing sectors
Market Outlook
We're about to embark on our worst week of the year historically on the S&P 500. Since 1950, the October 21st close (today) through the October 27th close (next Monday) has produced an annualized return of -45.17%. Before you grow overly bearish, however, you should understand that the following 10 days, from the October 27th close through the November 6th close has produced an annualized return of +59.91% on the S&P 500 since 1950. We literally have the worst historical week immediately followed the best historical 10-consecutive day period.
The close on October 27th also kicks off the most bullish extended period of the year. Since 1950, the S&P 500 has risen from October 27th through January 18th 65 of the last 75 years, producing an annualized return of +20.76%, more than twice the average annual return of the S&P 500 over the same period.
Sectors/Industries
Discretionary stocks are leading the action today and 20 of 21 industry groups within this space are higher. The best performer, however, is recreational services ($DJUSRQ) and the strength here is coming at just the right time:
The prior price high of 180 in January 2025 and the subsequent price low of 185 in August established a key price support range from 180-185. Note that the DJUSRQ tested this range on Friday before bouncing back this week to attempt clearing the now-declining 20-day EMA. Clearing this key moving average would be the first step to righting the technical ship in recreational services.
Cruise lines like RCL, CCL, and NCLH would benefit from continuing absolute and relative strength in this group. In my opinion, RCL and CCL are the better options.
ChartLists and Trading Strategies
We've seen a couple key price support levels hold on Mag 7 stocks in October, as follows.
AMZN:
META:
Both stocks could be on the verge of significant pre-earnings runs, but seasonality is much more favorable for AMZN, as you can see below:
November is a strong month seasonally for AMZN and, based upon the nice kick save at price support on Friday, November 2025 is setting up to be a strong one as well.
Upcoming Earnings
We have begun tracking the daily Upcoming Earnings and the Weekly Upcoming Earnings Relative Strength ChartLists for Q3 earnings. They are included on our website under ChartLists.
Economic Reports
Economic reports due out based on government data continue to be delayed, because of the U.S. government shutdown.
Happy trading!
Tom