Last week, the US market ended with Trump's victory in the presidential election, and the stock price index rose across the board, with the VIX falling sharply. Interest rates are still on an upward trend, but the rise has stopped for the time being.
Among stock price indexes, the Russell 2000, which tracks small-cap stocks, has risen by more than 8% over the past week. This is the first time it has risen by more than 8% in a week since the rebound following the 2020 coronavirus shock.
Looking at the market as a whole, the percentage of stocks in an uptrend has exceeded 40%, which is the point at which the trend tends to switch from up to down. There are also stocks that have seen a one-day rise of over 50% due to positive earnings surprises, and the market is in a state of considerable overheating.
There is a possibility that the rise will continue, but this week, I think it would be good to reduce risk and adopt a defensive stance in preparation for a sudden adjustment.
There are many stocks that are due to announce their financial results this week. This week, we will be focusing on the financial results of HD
Now, let's review last week's market by checking the chart.
Last Week in Review
Market environment
The yield on 10-year US Treasuries fell by -1.78%. Although the strong rise was halted with a long upper wick, the upward trend has not yet broken.
The VIX fell sharply by -31.73%, bringing to an end the gradual upward trend that had been underway since July.
The percentage of stocks in an uptrend has exceeded 40%. Looking at the past year, we can see that when the percentage exceeds 40%, the uptrend tends to stop and reverse. It may be a little early to say, but I think it would be a good idea to change to a slightly more defensive lineup in preparation for the risk of a sudden correction.
NASDAQ Analysis
This is a monthly chart of NASDAQ. As of November 8, the monthly rate of increase/decrease had already reached +6.07%, and a new high was being set.
This is the weekly chart for NASDAQ. Last week, it rose by 5.33% and exceeded the July high. Last week was a very strong rise that was accompanied by an increase in trading volume.
The number of NASDAQ stocks with high-low prices has fallen after a temporary spike to around 400, and is now fluctuating in positive territory. This is the first time since February 2021, when meme stocks such as GME temporarily moved in a bubble-like fashion, that this figure has exceeded 300.
The following is a chart of the peak reached in February 2021 at 369. After reaching this high, the NASDAQ fell by 11% in 15 days, so please be careful as it is a large adjustment.
Dow Analysis
This is a monthly chart of the Dow. As of November 8, the rate of increase/decrease for November was +5.33%, showing a very strong rise.
This is the weekly chart for the Dow. Last week, it rose by +4.63%. A weekly rise of over 4% has not been seen since the end
Analysis of the S&P 500
This is a monthly chart of the S&P 500. The current monthly rate of increase/decrease is +5.13%. The S&P 500 has also reached a new high.
This is a weekly chart of the S&P 500. Last week, the index rose by +4.67%. It has rebounded strongly after two consecutive weeks of decline.
Russell 2000 Analysis
This is a monthly chart of the Russell 2000. The current November gain/loss rate is +9.52%, the strongest rise among stock price indices. It is moving in a similar way to when the recovery after the 2020 Corona Shock started late compared to other indices.
This is a weekly chart of the Russell 2000. Last week, it rose by +8.79%. A rise of over 8% in a week has not been seen since the rise immediately after the coronavirus shock in April 2020.
Commodity Futures Analysis
Crude oil rose by 1.57%. Although it rose in the first half of the week, it fell in the second half, resulting in a chart with a large upper wick, and it seems likely that it will continue to move lower.
Natural gas is flat at +0.23%. If it can clearly break above the 2.848 resistance line, there is a possibility that the trend will change.
Gold fell by -1.98%. There is a small rebound seen when it falls to the 10 EMA.
Copper fell by -1.50%. It has broken below the rising trend line that began in August. It appears to be lacking direction, with upper and lower wicks.
Sector Analysis
All sectors rose last week, with industrial, consumer goods and information technology rising particularly strongly. Looking at the past month, all sectors rose strongly, with the exception of healthcare, energy and materials, which fell slightly. On a monthly basis, telecommunications services, finance and consumer goods were strong.
In terms of weekly performance by industry, coal, automobile manufacturers, textile manufacturing, public utilities, trucks, electronics, and aluminum are strong. Solar, silver, and chemicals are weak.
Trend of Individual Issues
Overall, there was an increase last week, but the strongest increases were seen in TSLA, PLTR, INTC, COF, and GS. The pharmaceuticals and Chinese stocks were slightly weak.
Strategy of the Week
Overall, the market has reached an overbought level due to last week's sharp rise. The number of high-low stocks on the NASDAQ also shows that the market is overheated.
I don't know if the decline will start this week, but I think it would be a good idea to gradually sell off stocks that have risen sharply and increase the cash ratio in preparation for the next upward move after the correction.
This week, earnings announcements are scheduled for HD, SHOP, SPOT, CSCO, and AMAT. I would like to narrow down the stocks that will rise after the earnings announcement due to a positive surprise.
Stocks to watch
We have added ARIS, DOCS, and FRPT, which saw strong rises after last week's earnings announcements, to our watch list.
This week's earnings release
This week, we will be focusing on the financial results of HD, SHOP, SPOT, CSCO and AMAT.
11/11
ARMK MNDY RDNT
GRAB IAC ZETA
11/12
AZN CAMT FOUR HD MOS ONON SATS SE SHOP TLN TME TSN
CART CAVA DOX EVCM IAS LNW LYV NTRA OXY PAY RKLB RKT SPOT STNE SU SWKS
11/13
CYBR GFF JHX
CSCO DLO TTEK
11/14
BILI BN DIS HP JD NICE NTES
AMAT ASTS GLOB OKLO POST SBS
11/15
BABA SPB
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