It was the perfect setup. The market had ignored rising Covid-19 cases worldwide, and mostly ignored news out of South Africa about a new variant. I wouldn’t call it overconfident as much as it is too comfortable. That comfort negated up sessions and any false bravado that clearly had markets and investors in a full swagger mode for most of the year.

For the week, market breadth was horrendous, and the biggest names took their share of lumps.

Market Breadth	NYSE	NASDAQ
Advancers	815	1177
Decliners	2714	3793
52-Week Highs	225	334
52-Week Lows	341	885
Up Volume	8.5 billion	8.5 billion
Down Volume	15.7 billion	9.8 billion

Key Upside Resistance Points

NASDAQ Composite: 15,622 breakout with a close above 15,845

S&P 500: 4,619 breakout with a close above 4,625

 

Overnight News Reads

I listened to a lot of videos, and read a lot of statements from health officials in South Africa, where it is a lot calmer than in the United States.

On a Sunday morning talk show, Dr. Fauci pushed for more vaccinations, including the booster shot – old lucky number “three” might do the trick.

By evening, it felt like calmer heads were intervening, including late-breaking news from the National Institute of Health (NIH).

*NIH DIRECTOR COLLINS: CURRENT VACCINES ARE LIKELY TO PROTECT AGAINST OMICRON.

Message of Bond Market

That was a heck of a swoon on Friday, but the ten-year yield has been listless after another spurt higher that came short of taking out the March high.

The Consumer

I went to the mall on Saturday, and it was fairly packed with the usual long lines at luxury retailers. There are signs consumers have been using savings at a rapid pace and may have to resort to more credit to keep the pace the market expects. Reactions to retail earnings misses last week underscore how much the Street is expecting a robust consumer.

Portfolio Approach

We added back several positions that we lifted on Friday, and we are adding a new position in Technology in our Hotline Model Portfolio. 

Today’s Session

Stocks have been higher overnight, but most indices off the highest overnight levels. Key early breakout points that could trigger more buying are:

• S&P 500 4,640
• NASDAQ 16,250
• Russell 2000 2,270

It is a big week for news, including the latest on the jobs market.

Message from Bond Market

The Yield Curve of 10/2 Year is signaling an economic slowdown in mid-2022.

The 10 year yield is in an ascending triangle formation signaling a potential breakout higher.

Comments

I agree with those that have said Corporations don't pay taxes, people do. Corporate America should be governed by the Constitution and should compete on the basis of producing what the American people want with the Government only being involved with what needs to be done to ensure an even competing field. Robert Clanton Robert Clanton on 11/29/2021 11:13:20 AM

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