(11/22/22) Markets are trying their best to mount a rally during the holiday-shortened week, but are only up 2% so far for the month of November.
Thats hard to comprehend following that 5% jump following that strong CPI report.
Since then, markets have not really gone anywhere.
With many traders out this week, there's not much activity or volume to drive markets.
But as markets consolidate above the 100-DMA, it's allowing the 20-DMA to play "catch-up," and providing additional, near-term support for the markets.
We're expecting some selling pressure going into the first two weeks of December, and a rally into the end of the year should place us around the 4,050 mark, which would be a good place to raise some cash and trim risk from portfolios.
That's what we did with energy and oil stocks; energy stocks down about 5%, but oil stocks are off 20% from their recent peaks.
As we get into 2023, all of this year's Fed rate hikes will begin to show up in the economy, and, combined with weaker economic data, weaker earnings, and reductions in estimates, will suggest markets' need to re-price lower.
That lower re-pricing will likely be the last leg of this bear market cycle.
When that happens, we'll want to be prepared to take advantage of the bullish shift.