ETF TRADING RESEARCH

Our November Stock Market Update in 3

Charts

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Hi, My name is Corey and I‘m with ETF Trading Research, today were

reviewing our recently published article…

Our November Stock Market Update in 3 Charts

The beginning of November marks the return of the Sell-In-May-And-Go-Away crowd. They’re returning to a market

that’s on much more solid footing than it was a few months ago. Here’s what we know…

Technical November Stock Market Update

US stocks enjoyed an impressive rally over the last month. The S&P 500 shot up 12.5% from the low on September 29th to the close on November 2nd. That’s an impressive gain to say the

least.

Along the way the S&P 500 cut through multiple resistance levels like a hot knife through butter. Now the large cap index

is back above all of critical moving averages like the 50-day moving average,

200-day moving average, and the 50-week moving average. All sectors except utilities have raced higher over the last

month.

Fundamental November Stock Market Update

The impressive move was fueled by a combination of better than expected third

quarter earnings and central bank actions that are beneficial to stocks.

There was a large influx of money that flooded out of short term treasuries after the latest Fed announcement. In short, the Fed put the possibility of December

rate hike back on the table… if the economic data supports it.

A big chunk of this money found its way into junk bonds. Look at the surge in

volume and strong price performance of SPDR Barclays High Yield Bond ETF

$JNK.

However, there are still headwinds for stocks. The US Dollar is strengthening

again. That puts pressure on commodity prices and corporate earnings made in

foreign currencies.

And slowing economic growth in China is hurting as well. Companies that made

a big push into China in recent years aren’t seeing the growth they expected for everything from basic materials to

consumer items.

Those concerns aside, there’s no doubt that the recent rally has flipped investor

sentiment. According to the AAII Investor Sentiment Survey, 40.4% of

investors are now bullish on stocks over the next six months.

That’s an increase of 5.6% from last week.

Key Takeaway From Our November Stock Market Update

Amazingly, the S&P 500 is back near the all-time high. Needless to say, the rally

has shot holes in the theories that stocks were entering into a bear market. But

don’t forget that the correction did break the uptrend.

And there’s still lots of uncertainty about the next market move. We could be at the beginning of new uptrend. Or we could enter another period of stagnant stock

returns and range bound trading.

Or the recent rally could be a counter-trend rally at the beginning of a down

trend. All three are very real possibilities right now. Only time and price action will

tell us what the next phase holds for stocks.

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