U.S. markets wrapped up a volatile month with the S&P 500 and Nasdaq closing higher in back-to-back sessions for the first time since September.

The recent rebound is signaling a possible near-term bottom is in but the rest of the week has a number of high profile earnings due out.

The longer-term technical outlook remains slightly bearish but the major indexes could follow the Dow's lead in making a run towards their 200-day moving averages on continued strength.

Volatility is showing signs of easing but remains just above an uncomfortable level for the bulls.

The Nasdaq surged 2% while testing a session high of 7,368.

Fresh resistance at 7,350-7,400 held with a close above the latter being a continued bullish signal.

The S&P 500 jumped 1.1% after trading to a second half high of 2,736.

Fresh and lower resistance at 2,735-2,750 held with continued closes above the latter being a more bullish development.

For October, the Nasdaq was the worst-performing major index, dropping 9.2% and its biggest monthly loss since November 2008.

The S&P 500 shed 6.9% for its biggest monthly decline since September 2011.

The Dow was higher by 1% following the intraday push to 25,336. Near-term resistance at 25,350-25,400 and the 200-day moving average were held by the bears with a close above the latter signaling additional strength.

The Russell 2000 added 0.3% after reaching a morning peak of 1,526.

Near-term resistance at 1,525-1,535 held with a close above 1,540 being a more bullish signal.

The Russell 2000 tanked 11% while the Dow sank 5.1% in October for its biggest monthly percentage fall since January 2016.

Technology and Communication Services were the strongest sectors after rallying 2.4% and 2.1%. Financials and Materials advanced 1.4%.

Real Estate and Utilities were down 1.4% and 1.2%, respectively, and were the weakest sectors. Consumer Staples was off 1% to round out the losers.

For October, Utilities and Consumer Staples were the only positive sectors after rising 3.2% and 3%. Energy plummeted 11.9% while Industrials were hammered for an 11.5% loss.

Consumer Discretionary plunged 11.3%, Materials were hit for 10.4%, and Technology tanked 10.1% to round out the double-digit percentage losers.

Global Economy - European markets posted strong gains on word that Brexit Secretary Dominic Raab said in a letter to the House of Commons Brexit Committee that he expected to finalize a deal with the European Union by mid to late November.

France's CAC 40 zoomed 2.3% and the Stoxx 600 Europe soared 1.7%. The Belgium20 rose 1.5% and Germany's DAX 30 rallied 1.4%. UK's FTSE 100 climbed 1.3%.

The Eurozone September unemployment rate was unchanged at 8.1%, matching expectations.

Eurozone October CPI rose 2.2% year-over-year, matching forecasts. October core CPI rose 1.1%, also matching estimates.

German September retail sales were up 0.1% monthly but down 2.6% year-over-year, and weaker than expectations for gains of 0.5% and 1%, respectively.

Asian markets settled higher across the board despite weaker-than-expected manufacturing data out of China.

Japan's Nikkei surged 2.2% and Hong Kong's Hang Seng was up 1.6%.

China's Shanghai jumped 1.4% and South Korea's Kospi advanced 0.6%. Australia's S&P/ASX 200 climbed 0.4%.

The China October manufacturing PMI dipped 0.6 to 50.2, missing expectations of 50.6.

The China October non-manufacturing PMI fell 1 to 53.9, missing forecasts of 54.6.

Japan September industrial production declined 1.1%, weaker than estimates for a drop of 0.3%.

Japan October consumer confidence slipped 0.5 to 43, missing expectations for a print of 43.5.

MBA Mortgage Applications sank 2.5%, in addition to a 1.5% drop in the purchase index and a 3.8% decline in the refinancing index for the week ending October 26th. The average 30-year fixed mortgage rate was unchanged at 5.11%.

The ADP Employment Report checked in at 227,000, versus expectations of 178,000.

Strength was broad-based with the service sector adding 189,000 workers, and a 38,000 gain in the goods sector.

In the former, trade/transport workers were up 61,000, leisure/hospitality added 40,000, and education/health gained 31,000. In the goods sector, manufacturing and construction employment each rose 17,000.

The Employment Cost Index was up 0.8% for the quarter, topping forecasts for a pop of 0.7%. Wages and salaries climbed 0.9%, nearly double the prior 0.5% gain. Benefit costs edged up 0.4% versus 0.9% previously.

On a 12-month basis, ECI was steady at 2.8% year-over-year.

Chicago PMI for October came in at 58.4, versus consensus of 60.

The 3-month moving average slipped to 60.8 from 63.2. The employment component increased at a faster pace than September, while prices paid rose at a slower pace.

Market Sentiment - The iShares 20+ Year Treasury Bond ETF (TLT) fell for a 3rd-straight session while tapping a low of $113.21.

Lower support at $114.25-$113.75 was breached and failed to hold into the closing bell.

We have mentioned a close below $113.50 would be a slightly bearish development with risk to $112.50 on a break below the 3-week trading range between $113.50-$115.

Lowered Resistance is at $114-$114.50.

Market Analysis - The Spider S&P 500 ETF (SPY) traded to a high of $272.76 with near-term resistance at $272.50-$273 holding.

More important hurdles are at $274-$274.50 and the 200-day moving average.

Current, but shaky support, is at $270-$269.50.

A move below $267.50 would signal a possible dead cat bounce and would be a bearish development.

RSI is back in an uptrend with resistance at 45-50. A move above the latter would be a continued bullish signal. Support is at 40-35.

The Industrials Select Sector Spider (XLI) made a run to $70.74 with fresh resistance at $70.75-$71 holding.

The latter represents late June and early July support with continued closes above this level being slightly bullish.

New support is at $69.50-$69 with a move below the latter possibly signaling a false breakout.

The 50-day moving average remains in a downtrend and is on track to fall below the 200-day moving average.

This would form a death cross and is typically a bearish technical signal for lower lows.

RSI is approaching resistance at 35 with a move above this level signaling additional strength towards 45-50. Fresh support is at 30.

Existing Position Update

Starting to see upside movement.

AAPL will be the tie breaker between the bulls and the bears.

The fact that we're at the 200 day line tells me that funds are ready to move all in.

We're heavily tilted towards the bullish side of the market at this time....next few sessions will be interesting!

Roger Scott