Stock Market Update Wednesday November 22, 2023 If Santa Claus should fail to call, the bears may come to Broad and Wall. "The Santa Claus Rally" is a term precisely defined to encompass the final five trading days of the year and the first two days of the new year, a concept initially coined by Yale Hirsch quite some time ago. This particular seven-day trading window often experiences a rise in stock prices. Traditionally, how stocks perform during this period is viewed as a harbinger, signaling potential market trends for the upcoming year, especially if this interval does not result in an upward movement in stock values. The reason why I am writing this now is because next week you are going to hear Santa Claus Rally a lot from the talking heads on CNBC and Bloomberg.
Bullish Sentiments Prevails as Thanksgiving Approaches Maintaining a Bullish Stance in the Current Uptrend As we approach the Thanksgiving Holiday, the market continues to exhibit a strong uptrend, with traders seemingly reluctant to disrupt this positive momentum. It's important to note, particularly for our overseas readers, that Thursday marks a U.S. holiday. Consequently, the exchanges will be closed, reopening on Friday for a shortened trading session. Historically, the Friday following Thanksgiving has seen minimal trading activity and little market disruption, so our outlook remains bullish.
Market Performance and Commodity Movements
In terms of market performance, there was a modest gain of just under 0.5% for the day. In other financial sectors, the dollar ('green paper') showed slight strength, while fixed income was somewhat weaker. The metals market saw a decline of about 0.5%, and the mining stocks experienced mixed results with only small changes.
Wednesday's Market Breadth and Bearish Divergence in SPX500
Wednesday's trading session closed with positive market breadth, reinforcing the current bullish trend. However, there's an emerging concern that warrants attention – a bearish divergence in the SPX500. This pattern indicates a decrease in upward momentum and often precedes a corrective downturn. It's crucial to understand that such divergences don't necessarily have an immediate impact just because they've been identified. These patterns can persist for an extended period, sometimes leading to a false sense of irrelevance, before they eventually influence the market.
Some important charts 📈 we are watching 👇
Thanksgiving 🦃 Wishes
As we all prepare to enjoy the Thanksgiving holiday, I want to extend my best wishes to everyone for a wonderful celebration. Whether you're saving room for leftovers or simply enjoying the break, it's a time for gratitude and relaxation.