A Peek Above With A Pull Back Yet Again

CAMS Weekly View from the Corner – Week ending 11/20/2020

November 23, 2020

We are going right back to the well so-to-speak this week with a follow-on from our previous Weekly View’s focal point.  That is, a hyper-vigilant watch on the well recognized S&P 500 Index as a depiction of the general market landscape and its behavior of late.

Previously we shared how there has been plenty of price action in recent months but overall nothing has changed.  This remains the case with a slight twist as, yet again, the S&P Index made a small attempt at changing this narrative.


Click For Larger View:  http://schrts.co/sCuQYgtG

The above picture depicts the S&P 500 Index for the previous twelve months – the same view we shared last week in fact. 

The red arrows highlight the price action of late with the blue line highlighting how nothing has changed in recent months as an upward trend has been thwarted with each attempt.

Early this past week the S&P 500 made yet another attempt to break through the blue line with a trend attempt but quickly failed.

Importantly, the attempt at moving through the blue line was short-lived and feeble.  In fact, without clicking the link for an expanded view it is a bit difficult to identify the attempt at trend. 

Follow-on days reflect how, yet again, the price action moved below the blue line as a statement from market participants that an upward trend is not happening yet.  At this point what did not happen was a notable downward fall which occurred in previous blue line failures.

We are watching this market behavior closely as internal market structures remain quite positive.  History offers, with such structural health, that an upward trend should launch but this does not come with a guarantee.

In fact, when such internal strength is built and no real trends develop then downside price action becomes a concern.  Hence, at this stage we are focused on trend attempts with the above chart succinctly depicting what various stock market indices are reflecting.

Relative to stock market price action a cautionary optimism seems to exist within the market landscape via the behaviors that have radiated from collective market participants.  We are watching closely for actual confirmation of this via an upward trend that will actually hold.

I wish you well…

Ken Reinhart

Director, Market Research & Portfolio Analysis

Footnote:

H&UP’s is a quick summation of a rating system for SPX9 (abbreviation encompassing 9 Sectors of the S&P 500 with 107 sub-groups within those 9 sectors) that quickly references the percentage that is deemed healthy and higher (H&UP).  This comes from the proprietary “V-NN” ranking system that is composed of 4 ratings which are “V-H-N-or NN”.  A “V” or an “H” is a positive or constructive rank for said sector or sub-group within the sectors.

This commentary is presented only to provide perspectives on investment strategies and opportunities. The material contains opinions of the author, which are subject to markets change without notice. Statements concerning financial market trends are based on current market conditions which fluctuate. References to specific securities and issuers are for descriptive purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. There is no guarantee that any investment strategy will work under all market conditions. Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. PERFORMANCE IS NOT GUARANTEED AND LOSSES CAN OCCUR WITH ANY INVESTMENT STRATEGY.