The stock market appears stuck at these levels — Here’s what could get it moving again


Traders work the floor of the New York Stock Exchange.

NYSE

After rising on the vaccine news, the stock market is likely to rise to a higher level as the rise in virus cases competes with the promise of a more general economy in the coming year.

On November 9 of the P&P, the S&P 500 flew high. Announced that its vaccine was highly effective, and that it would be distributed by the second half of next year. That day the S&P touched a record of 3,645 on an intraday basis before closing at 3,550. Since then it has gone higher, and was around 3,600 on Wednesday, but did not return to its intraday high, even as Modern announced the positive vaccine news on Monday.

QMA’s Chief Investment Aid said, “The market is in the Balancing Act right now. We can look forward to six to 12 months and many vaccines can be widely available and administered, and we can return to normal life.” ” Strategist. “There are going to be a lot of challenges at the same time as the disease does its work through the population.”

The market is trading on two subjects, with cyclical stocks moving at high and speed and large technical gaps. Many of those names, like FANG stocks, benefited the most when the economy closed and pulled the stock market out of the March meltdown. Now, those who were penalized, such as airlines, energy and cruise ships, are moving at increasingly higher rates.

“I still think we’re in a very powerful bull market, and people should be very cautious about being very careful,” said Robert Slumer, Fundstrat’s technical strategist. “Just remember that we made a huge move in the S&P 500 on October 30 from fairly oversold levels … we’re just a bounce. There are too many short-term indicators overbought.”

Sluimer said it seems as if market areas are in a relay race.

“Leadership can pass the baton from time to time within a bull market,” Sluimer said. “One group is headed, and then another group is headed. While there was a huge jump in Q2 in the summer of structural leadership in development, many of those stocks are now stalling.”

This will include Amazon and Netflix, which have not made their high recoveries since early September. Facebook is trading below its high August, and the peloton has declined since mid-October.

Evidence of a heading?

“A lot of people are making a case that these are largely tops. I don’t see evidence of that. They look like they’re in a very normal, intermediate consolidation.” He sees scope for both development and cyclicals to be higher, and suggests that cyclists who hit Pfizer have gone above high

For example, Sluimer stated that both the Financial Select SPDR ETF and the Energy Select Sector SPDR Fund ETF XLE had their November. Behind 9 intraday highs.

“I look at names like Amazon and Netflix and my guess is that they are going to be in purchasable condition as we approach the end of the year, or early next year,” Sluimer said. “Participation is getting deeper into the cyclical areas. But there is nothing wrong with taking a break. Your best players sit on the bench every once in a while.”

Sluimer said he also sees the possibility of a pullback, but for now only a shallow sell-off is expected.

Positive vaccine news coincides with the release of Wall Street’s new 2021 outlook, and strategists are on the upswing. Many of them see double digit percentage gains in the S&P 500. Credit Suisse announced a 4,050 S&P target on Wednesday, while Goldman had a target of 4,300 the previous week and JP Morgan was at 4,500. Citigroup set a target of 3,800.

“One of Wall Street’s oldest things has been bought on rumor and sold on news,” Keon said. “In this case, we got a big shock on the news but then in a while the market absorbed it … It will be very difficult in the next six to 12 months. The market is ready to see it in the past, but it Will vary from day to day. There will be a piece of bad news, a piece of good news. It will work its way higher, but it will be in fits and sits. We think we will have more rotation towards higher value stocks. See., More cyclical stocks, especially when you get clarity about when vaccines are going to be widely distributed. “

Some stocks performed well during the epidemic.

“There is a divide between companies that drive demand ahead of the epidemic and those that accelerate the technological disruption resulting from the epidemic,” Keon said. “In some cases, I think we have changed the way we do business and the way we live our lives.”

Keon said profits are recovering amazingly, and some companies have managed to achieve savings that could set them up for future consolidation.

But that too sees the possibility of market fluctuations. “The markets stop all the time for whatever reason … The markets are all the time the wind blows. We are going to get negative news on the virus for months to come,” he said.



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