SGT Chart Book: The Bulls are Back in Control
The S&P 500 saw a 2.2% gain for the week. The broad-based index, which booked a third straight weekly advance, has closed higher in 13 of the last 15 sessions.
"Risk on is back"
Last week’s inflation report was the latest reason for investors to get excited, helping extend the November rally in the S&P 500 to 7.6%. The markets are looking at the Federal Reserve’s rate-hike campaign to now be over and done with.
The Russell 2000, which tracks small-cap stocks—seen as particularly sensitive to the state of the economy—added more than 5% for the week.
Investors have purchased $7.6 billion into QQQ ETF, which tracks the Nasdaq- 100 Index, from Monday to Thursday, more than the fund has taken in any week since its 1999 launch, according to Bloomberg.
Both bonds and stocks had become deeply oversold in recent weeks, so they reacted very positively to signs that inflation is under control and coming down.
Bond yields were little changed, with the 10-year Treasury yield closing Friday at 4.441%,
The benchmark yield is down more than four tenths of a percentage point in November after touching 5% late last month.
Breach of down sloping trendline, while market may be a little over bought in the short term, we look set to test highs into year end.
1.0960/65 level should provide some level of resistance (61.8% retracement) of the down move seen during 2023.
The up channel defines the technical picture, sellers emerging close to previous top and worries of BOJ potential intervention.
After a pullback to the trendline, we have seen impulsive wave higher to test near $2,000 again.
Major trendline resistance is seen around 24.40/50 area.
Double top dominates.
Until next week, happy trading.
SGT Trade Desk
Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.
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