Violent downswings happening into Monday morning's stock market opening. We'll see what happens from here on. Lots of news to fuel the fire. Staying cautious until this sort itself out.

The major indices - $SPX, $NDX, $DJX, and $RUT - are all at new all-time intraday and closing highs now. Clearly, this market has momentum.

We have to remember that markets look the best at their high and the worst at their low. The market is overbought, but overbought doesn't mean "sell".

 Both 200-day and 50-day moving averages are rising. Uptrend continues for now.

At issue now is whether we are witnessing another mild, one-off dip or, instead, the beginning of a larger market correction.

In summary, the market is overbought and getting more so almost every day.

Over the past three days, SP-500 finally managed to break out to new all-time closing and intraday highs. Thus, the SP-500 chart is bullish, as there is no classical resistance -- by definition -- when it is at all-time highs.

The reason people don’t make big money in markets is because they chicken out too soon. The reason people blow up their accounts is because they don’t chicken out fast enough.

 "The secret to winning is learning how to lose.

That is, learning to bounce back from failure and disappointment—undeterred—and continuing to steadily march toward your potential.

Your response to failure determines your capacity for success."

"One very important skill great traders have is the ability to gauge when to step on the gas and get aggressive and when to ride the brake or even sit out completely. Most of the time you should not be trading very aggressively. Trading requires a lot of patience and stalking."

In a good trading environment stops will hold on balance while breakouts get away from you and you wish you had bought more. In a poor environment, prices will slice through stops, slippage is larger than normal and on balance you struggle to make progress or show loss.

In summary, the broad market chart remains bullish and will continue to be bullish as long as SP-500 continues to close above 3500.

We are entering a seasonally bullish period for the market, between Thanksgiving and the new year. On average, the Russell 2000 Index rises 2.8% over that time period, with SP-500 not far behind. There are exceptions, of course 2018 being the largest exception. 

"A most beneficial use of time is silent meditation, while searching for guidance from within."

We all experience rare moments when a blinding revelation comes to us, when we suddenly see things differently than ever before. Usually, however, we learn the truth about ourselves gradually, over long periods of time, from quiet introspection. We are all spiritual, but some of us have learned to tap more effectively into the great strength that resides in the spiritual portion of ourselves. The spirit is not boisterous and noisy. Getting in touch with your spiritual self demands tranquility and solitude. Make sure you dedicate a portion of every day to thought and study, to think and reflect upon your life. Choose a time and place that best allow you to relax your mind and devote your thoughts to reflection.

Extreme Greed. Fear & Greed Index is at 91.

 

"Not enough is said about the power of thinking about one topic for a long period of time. If you revisit a topic continually for a few years, most problems (and many solutions) will occur to you at some point. Expertise can be the gradual accumulation of many modest insights."

In summary, the SP-500 chart looks bullish and will stay bullish unless SP-500 closes below 3500.

 The broad market, as measured by SP-500, finally reached a new all-time closing high this week on Tuesday, November 16th. It was unable to hold that level and has now fallen back a bit. In fact, it has closed back below the old September highs of 3588. 

"Whatever the mind can conceive and believe, the mind can achieve."

 

The market remains volatile and -- so far -- within its previous trading range, on a closing basis.

Last Monday, the COVID-19 vaccine news caused SP to gap up on Monday's open.That was the largest percentage gap to a new all-time high in history.

As traders know, there's an old adage to "sell the news," especially if there has been anticipatory buying before "the news." And they did, driving SP back inside its 3200-3600 trading range.

It still seems that a close above the highest prices reached in September -- would be an upside breakout and would have follow-through. So that is near-term resistance. A breakout to the upside would be worth following.

"When valuations are extreme, turns become inevitable, and a small shift in sentiment is often all it takes to initiate a [huge] swing of the pendulum."

In summary, SP-500 is range-bound and volatile.

Election-related or not, the move from the bottom to the top of the SP-500 trading range in just four trading days was impressive. Trading range trading until there is a break-out. The recent moves have pretty much wiped out what had been a support and resistance area so the edges of the range itself are the only meaningful support and resistance currently.

"It's interesting that everything is up today as the dollar tanks [except] oil, and some oil related stocks. That's because investors do not expect actual economic growth that would require more energy, just more stimulus that pumps up asset prices as it sedates the real economy"

What price action to expect after the Election ?

One scenario is for the market to rally after the election. Why? There are three reasons:

• If Biden wins, people can expect a large stimulus package.
• If Trump wins, people can expect favorable business policies to continue.
• Regardless of who wins, everyone will be relieved that it is all over and buy the market.