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Still Within (trading) Range November 14, 2020

Posted by Tom in Thoughts.
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Nov. 13, 2020 – Monday sure started off as a break away rally day with the election out of the way and a COVID vaccine announcement, but it quickly turned into a Distribution Day (red down arrow on the chart).

click to enlarge

The opening kissed the previous high at 12074 and then quickly headed “south”. This on high volume. It’s like many investors just wanted to get back even. The rest of the week was basically a drift higher but on low volume, with support at 11425. Thus prices remain in a broad trading range bound by the purple channel lines.

Money Flow is negative, not recovering from the previous sell off, but Volume flow is slightly positive. Price Strength is Neutral. I’m seeing a mixed bag from my other technical indicators. Market breath is neutral while overall price momentum is positive. I’d like to see these two areas in sync before getting completely back in. Thus I’m still holding a fair amount of Cash right now.

One reason for being hesitant is that we’re still in earnings season and next week major retailers report 3rd quarter earnings & maybe projections too. This will be an indicator of consumer confidence and a sign (perhaps) of what to expect for holiday sales that are right around the corner. Sure, political drama does continue but few doubt the results, though Georgia could swing the Senate and provide a smoother time for the Biden administration. That will bear out January 5 so we’ve got some time on that.

One bright spot is the strength in small and mid cap sectors. Aslo banks and Finance areas picked up after lagging behind for so long. Also select countries are showing some early strength. Something to watch.

Short Term Sector Strength –

That’s about it for now . . . a mixed bag with prices in a trading range. This could be a stock pickers market with only a few sectors really performing well. (note: I’ve added a market performance indicator to the sector chart above; this is strength relative to the S&P 500 Index.)

Have a good week. ……….. Tom ………

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

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