EB Daily Market Report - Brief Update - Thursday, November 14, 2024
I'll keep this quite brief as I prepare for our Saturday webinar, "Capitalizing on Small- and Mid-Cap Strength". There is no need to register for this event as you are automatically registered by virtue of being an EB member. If you cannot attend the 11am ET webinar on Saturday, no worries. We'll record the event and you can check out the recording at your leisure.
We're seeing a bit of weakness, the kind that I discussed at Tuesday's max pain event and also in Tuesday's Daily Market Report. Many stocks have a ton of net in-the-money call premium, so it's not too surprising to see our major indices drift lower. We exited our Model and Aggressive Portfolio stocks late morning on Tuesday, because of the elevated risk of short-term selling.
Here's a quick look at the 5-day 10-minute chart of the S&P 500:
It's been choppy and the selling since our first Tuesday DMR (Part 1) has been fairly minimal. I'm not looking for a huge selloff, though anything is possible. I believe jumping back into positions after a 1-2% selloff isn't a bad strategy. I'm personally doing some of that. The IWM was the most overbought, so we've seen more selling in that area of the market:
Remember, the previous all-time high was just below 235. So after the IWM cleared this key resistance level, that becomes initial support on any selling. If we fail to hold this support level at today's close, it likely suggests further short-term selling down to the rising 20-day EMA:
It's also worth mentioning that jobless claims came in a bit below expectations, a bullish signal for our economy. Meanwhile, this morning, the October PPI reinforced what we saw from the October CPI yesterday - inflation isn't an issue.
9 of 11 sectors are lower, as Tesla (TSLA, -5.30%) is weighing on autos ($DJUSAU, -4.61%) and consumer discretionary (XLY, -1.25%). Health care (XLV, -1.51%) is today's weakest sector and is trading at its lowest level (144.61) since the second week of July.
Happy trading!
Tom