Technically Speaking – November

December 6, 2021

Technically speaking:

Long Term Resistance: SP500  46450 – 4700  then 4735 – 4750

Long Term Support: SP500  4500  then 4460 – 4380

Markets rallied to new highs in mid-November only to be hit hard Thanksgiving week with the ½ day on Friday being the worst decline of them all. The SP500 has found support at 4500 about 5% from the highs. The fear of the new covid strain coupled with Fed Chairman Powell admitting that inflation isn’t transitory has created a dialogue of negativism. If SP500 breaks under 4500 and stays, there a drop to 4380 to 4460 is possible. The fed has changed their stance with inflation and thus will start a faster tapering process and eventually raising the Fed funds rate. This is more concerning than Omicron fears. I still believe if things get worse the Fed will reverse course and start stimulating again or at least not begin to raise interest rates. The good news is if the FED raises rates, they believe the economy has a strong footing and will be able to hold its own while they battle inflation. I am not sure about this soon. I believe the FED is behind and may react too fast. They will probably start mid to late 2022. Use this pullback to upgrade your portfolio. I see Santa Claus coming to town with a nice rally. Be prepared early next year if we rally again to reduce risk and learn to protect your portfolios.

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