The bulls fought hard this past week and the S&P 500 was up 4.85%! This is exactly what the doctor ordered when it came to saving the bullish structure of the S&P 500. The S&P 500 bounced from support and is now toward the top of a smaller trading range but still in the bottom half of the larger trading range started at the beginning of this year.
The longer-term indicators stayed positive for November. They were EXTREMELY close to turning negative, but they did not. That means we have at least another month of a risk on stature when it comes to the long-term holdings. The US equities market is still the place to be over the All World (ex-USA) and short-term treasuries. When it comes to the styles of the market, growth is beating value and large caps are still the leaders over small caps.
The plan for this week…most of the vehicles that we watch created buy signals for the week. We definitely want to add some more risk on the table if we do in fact get a buy trigger this week. When I say signal, it means get ready…when I say trigger, it means go! The trigger is the actual event that causes us to enter the buy or sell order. Since we have a lot of choices as the markets are relatively highly correlated right now, we want to take the strongest signals.
How do you define strength? Easy! The ones that have held up the best…the ones that depreciated the least in the last pull back. The current market leads us to the Healthcare Equipment industry. This is the one we want to focus on coming into this week.
This should be an interesting week in the market. We’ll see if the bulls can continue with their strength or if they do in fact fizzle out. Most of our stops are relatively far away after such a strong advance in the market this past week, but of course, we’ll be ready for all possible outcomes! With that, have a great week!
Adam Straseske, CMT