Technically Speaking – November

December 5, 2024

Long Term resistance; SP 500  6075 – 6100  then 6150 – 6200

Long Term Support: SP500   5900 -5850  then 7500 – 5640 then 5500- 5450

Investor psychology has been very bullish since the Trump victory. Markets have continued to press higher and make new highs almost every day. While I do believe Trump will be great for the economy it will take time for his influential changes take place. The Markets are at the top end of the resistance areas and evaluations for many companies are being stretched. My experience tells me to be cautious because we all know that markets don’t just go up. When Trump eventually gets in and starts to officially discuss Tariffs into an already high-priced market the reaction can be violent to the downside. As we know, markets go higher in an orderly fashion but fall in a chaotic quick dissent. Investors also buy with their brain but sell with their emotions. I am not expecting a crash, and nobody can honestly predict a crash, but over evaluations and extreme bullish environments usually end with a scary 5 to 10% pullback. This is a normal shakeout and that’s what I expect sooner than later. If that happens, we could see the SP500 trying to find support around the 5700 down to the 5400.

If and when this occurs, It will be a great buying opportunity for the same reasons everyone is bullish today. Trump will be reducing government expenditures, cutting regulations, reducing taxes and bringing energy prices lower. This is all bullish for the markets. The borders will be closed and eventually, jobs will be created as American companies become strong and profitable. At first, we will have bumps in the road and the naysayers will hope for the worst so be prepared to be a buyer on bad news being spewed from the mainstream media. For now, be patient and wait for your opportunities, they will come.