Initial signs of Technology slowdown, but China, Crude made larger reversals Array ( [cookie] => 7584e7-ae0e4f-6a2286-e059cf-305f08 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_pro [visitor_id] => 591083 [reason] => [method] => ) 1
Equity trends remain bullish from early August but structurally are growing closer to upside targets that might produce a stalling out into next week. While the post-election breakout produced a multitude of breakouts of various triangle patterns on numerous stocks and indices, the lack of broad-based strength over the past month remains a bit troublesome. US Dollar and US Treasury yields both appear vulnerable to weakness in the weeks ahead, and SPX has reached an area of channel resistance, which should translate into a pullback starting next week. While some choppiness could happen in the short run, I still anticipate that the back half of November should produce consolidation given cycle composites, Elliott-wave theory, DeMark exhaustion signals, and near-term breadth deterioration. However, at this time, Equity indices remain resilient and haven’t yet begun to turn down. Bottom line, while trends are bullish, I think it’s wise not to get too complacent given the numerous factors that are suggesting a potential short-term pullback could get underway in mid-November.
No real change from yesterday’s thinking. Near-term trends remain constructive, but both SPX and QQQ showed a bit more signs of some minor stalling out into Friday’s close that also coincided with XLK having found strong resistance near all-time highs.
I'll repeat yesterday’s comments for emphasis in the paragraph and bullets section below: “While many investors feel that the market has passed the window of danger from this past fall, it means that a direct line higher into year-end is possible. I disagree with that thesis, as SPX is up approximately 800 points since early August lows and trended higher in August, September, and October. This resilience defied the odds of normal poor Election year seasonality during this time but does not suggest that Equities are immune to any consolidation in the weeks to come.”
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