All 4 Market Forecast lines for the S&P 500 (NYSEARCA: SPY) are pointed lower with bullish near-term (blue line) divergence still a possibility with the S&P 500 sitting at major support level.
The Dow Jones Industrials (NYSEARCA: DIA) and S&P 500 are putting in their lowest closing price for the decline. However, both stock market indexes are still trading above the long lower shadow on the weekly candle, post October options expiration.
The Russell 2000 small-cap index is starting to show relative strength with possible double bottom reversal pattern.
As well, the Russell 2000 came close to its first oversold cluster including Market Sentiment for the first time since early October 2011.
The S&P 500 dropped sharply below its 200-day MA; the broad index is close to forming a “death cross”. We are also seeing bullish divergences setting up on MACD and Stochastic indicators.
Note that you can subscribe to the Market Outlook daily email to receive daily and weekly overbought and oversold Market Forecast clusters watchlists for the S&P 500.
Weekend Market Outlook Video – Week of November 26:
Below are additional bullet points of market items discussed in this weekend’s video:
- Predictably, light volume this pastweek and no significant pickup in volatility term structure heading into a seasonally bullish week for equities
- Crude oil with another capitulation-type move on a half-day of trading. These moves can be reversed easily when normal trading resumes. /CL is sitting below its 2-standard deviation channel around its upward-sloping 1-year linear regression trendline – similar to the S&P 500.
- Big week ahead next with FOMC minutes and GDP revision – along with Conference Board’s leading indicators index.
- Safe haven sectors holding up strong this week with persistent weakness in new Technology, Discretionary and Communication Services sector. Interest-rate sensitive areas in particular are showing relative strength with recent weakness in long-term Treasury yields.
- Key focus will be on rate hikes odds this week with odds for March hike falling below 40% and odds for December hike now down below 80%
- Bullish trade idea in Consumer Discretionary area in an industry that has seen sharp declines prior to the October morass and now seems to be building in a bottom.
Twitter: @davidsettle42 and @Market_Scholars
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
