Resistance holds Firm; Now what? November 30

In today’s daily market outlook in the Profit Compass, I review the current technical posture of the indexes and possible ramifications of the G20.   Additionally  Relative Rotations of the SPDR Sectors and World Indexes are given. Key levels and trading plans are provided with commentary aimed at keeping you on the right side of the trade.
The Indexes: SPY, QQQ, IWM

As expected, overhead resistance was briefly tested across all 3 major indexes but price backed away. Although there was no change in the technical posture on the daily charts, the RSI and PPO indicators on the 60 minute charts are showing early signs of rolling over. One only needs to look back over the past few occurrences to see that very bad things have followed for price.   The key inflection points are noted on the charts.

The problem with indicators is that they mean nothing when an event like Powell breaks news or when Xi and Trump shake hands.  Any move today could instantly be reversed Sunday night.

Positioning ahead of the G20

I encourage traders to review holdings one last time before the weekend to ensure everything is as you want it.  Nothing wrong with holding a bias, but just like a big earnings event, we have no way to know what the reaction of the market will be.  Bet no more than you can afford to lose if a dramatic market reaction goes against your positions.  Approach the event as you would for a big earnings event.

SPDR Sector and World Market Index Relative Rotations

I am a big fan of relative rotation studies.  They provide a nice visual snapshot of how a collection of trading vehicles perform against a benchmark. It give me hints of where to hunt for stocks that are poised to outperform.

Today I do 3 week relative rotations of the $DJUS industry groups within the sectors as well as the rotation of the sectors vs. SPY.   I also compare a 10 week rotation comparison of all the world market indexes vs SPY

Because of the number of charts and for your own convenience, a copy of the Daily Profit Compass can be downloaded from DropBox with this link.

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Hope to see you soon!

 

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