Technically Speaking

December 2, 2020

Long Term resistance –SP500  3670 -3700

Long Term support – SP500  3000 – 3050

November was the best month for the 30 stock Dow Industrial average since 1987. The rally was fueled by optimistic vaccine news and a Presidential election that didn’t drag on for months as some had feared. Investors cheered the probability of a split Congress which has traditionally been good for the market and were relieved there was no “Blue Wave”. Strong rallies in November have often led to sub-par December returns. However, the vaccine should be ready soon and the much needed stimulus package appears to be on the way, so downside should be limited. There is much excitement in the market but at some point earnings will come into play. That will be difficult for the next few quarters and some industries will be hurt more that others. If the SP500 falls under 3500 I would look to be a buyer into an expected rally for the first quarter next year. If we rally first, use that rally to lighten up on some of the positions that have skyrocket.  Also, rebalance your portfolio as we rally to stay within your risk tolerance level, this will allow you to raise some cash. Remember its fun to make fast money as we have months like November, but don’t forget how you felt when the markets have a rapid decline.

Enjoy the holidays, Stay Happy and Stay Healthy. This Year will pass.