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US Stock Market Analysis November 2021

Are the markets going to continue to move higher? Is it in an uptrend or downtrend and where are the support and resistance? 

November 26 2021

Today will be doing a video analysis. Hope this helps!

November 24 2021

The SPX manage to find some support at the daily 20 MA but looking at today's futures it might drop below the daily 20 MA.

We can take some guidance from the SPY.

If SPY drops below the uptrend line shown on the chart above, we could have more correction. And if SPY drops below the low set on the 10th of November, then we really could see some bigger correction.

On the other hand if SPY manages to stay above the uptrend line then we could see SPY going higher.

November 23 2021

Yesterday we really had a very wild day.

The SPX moved into new all time highs only to reverse back down towards the closing. This is quite normal and it resulted in a distribution day. This does not spell the end of the bull market but it just tells us that market participants are nervous of the short term.

A topping tail formed and this is usually a bearish signal that gives us a warning that the next few days might close lower. However, we are at the rising 20 MA and this MA could act as a support.

If the 20 MA support holds, this will help the SPX to move back up. If it moves back up to near the top of yesterday's topping tail this could signal a failure of a topping tail signal.

Failure of a pattern is sometimes more important than the success because we know that if it fails it means the opposite will happen. A failed topping tail will eventually result in higher prices for the stock market.

On the other hand if the 20 MA support does not hold then we could be in for more correction.

A look at the 2 hour chart of the SPX tells us how the sell off accelerated. The SPX broke the uptrend line and went below the 2 hour 20 MA and 50 MA. This resulted in a quick sell off.

Breaking an uptrend line even in a short term chart is not good and this could signal the beginning of something bigger.

But at the moment, the index is resting and finding support at the rising 2 hour 200 MA. You can see 2 or 3 bottoming tails forming and this could offer the bulls some hope that it may go back up.

If the bottoming tails work and the 2 hour 200 MA support hold then we could see the SPX going back up very soon.

On the other hand, if the bottoming tail fails and SPX trades below the 200 MA and the bottoming tails, then we can expect more selling or correction.

If you take a look at the daily chart of the Dow Futures you will notice that the Dow is much weaker than the SPX. This is not necessarily a bad thing since the Dow is correcting to a strong area of support.

The support area is the previous high support which I have highlighted in green.

To add more support, the Dow is very near to the rising 50 day moving average. It might or might not meet the 50 MA but if it does, this could be a psychological support that may help to keep the index from falling.

This week is Thanksgiving week and we will have a stock market holiday on Thursday and a shorter trading time on Friday which I think closes at 1 pm ET.

Historically, according to the Stock Trader's Almanac the stock market has gains from Wednesday to Friday when it opens. So if Dow finds support at the support area or the 50 MA this could be another year where that will happen.

A correction might happen to Wednesday and then a bounce up by Friday. How big the bounce we do not know but the 50 MA and previous high support is pretty strong to be ignored.

Which means any correction in the Dow might be not too much until we see the 50 MA gets taken out.

If a bounce up happens, then if the Dow breaks above the downtrend line that I have drawn then it is possible for the Dow to have another leg up to go higher towards the end of November and early December.

So Happy Thanksgiving in advance and Happy Trading!

November 22 2021

The SPX is still trying to breakout of a daily ascending triangle pattern. We should continue to have a bullish bias as long as the S&P is above the daily 20 MA.

With regards to an ascending triangle, if SPX is able to breakout higher then as long as the SPX stays above the top of the chart pattern, then we will see it moving higher and continue to make new all time highs.

Watch the lower uptrend line in the ascending triangle as well. If SPX breaks below this uptrend line then we could see SPX have some correction. This may not necessarily be bearish but we should be aware of a correction if it breaks below the uptrend line.

So far I do not see it breaking below the uptrend line but rather it looks like it want to break higher. So we should continue to have a bullish bias.

The Nasdaq 100 has already broken above a previous high and so this previous high will now act as a support area. I have highlighted the green area as a new support.

As long as the Nasdaq 100 stays above this area, then we should expect that it will continue to make new highs.

The rising daily 20 MA also continues to point to a bullish bias in the short term.

The SMH or semi has also broken above a 2 hour ascending triangle.

This is bullish and as long as the SMH stays above the top of this pattern we should continue to be bullish on the semis. As long as the semis are bullish we should expect higher prices in the stock market.

The rising 2 hour 20 MA and 50 MA continues to tell us to remain bullish in the semis.

November 19 2021

We had a really great day in AAPL and NVDA yesterday. Both of these stock's extra good performance helped to lift the Nasdaq and the S&P 500.

The daily chart above shows us that the SPX is breaking out of a small ascending triangle. The presence of a small ascending triangle in an uptrend is a very positive development and this is usually a continuation pattern that helps to send the index/stock higher.

As the charts of major components of the S&P such as AAPL, GOOGL, MSFT, NVDA and AMZN are really good, this can really help to propel the S&P 500 higher.

Watch the small ascending triangle. If SPX manages to stay above the top of the ascending triangle, then we know that the markets will continue to be bullish short term. Also do stay bullish as long as the SPX is above its rising daily 20 MA.

If you are a regular reader of my stock market analysis, you would know where I became bullish, remain bullish and start to be cautious. I do hope that you benefit a lot from this analysis. If so, do drop me an email or note or on FB so I know that you benefit from this.

The daily chart of the SPY also shows a small ascending triangle. Yesterday the SPY had a sell off intra day only to recover and close near the top. This help to form a daily bottoming tail pattern.

From the looks of the futures market, we know that there is a big possibility that the SPY will trade above the ascending triangle and also the daily bottoming tail.

This will be bullish for the SPY. You can do the same analysis with the ascending triangle in SPY as with the SPX. As long as SPY remains above the top of the small ascending triangle, we should remain bullish short term. We should also remain bullish as long as the SPY stays above its rising daily 20 MA.

The next chart I want to show you is the 60 min chart of the QQQ. It has already broken out of an ascending triangle. The top of the pattern will be a support. I have highlighted it in green.

The QQQ has also broken above its previous high and this will now become a new area of support. As long as QQQ stays above the new support then it will continue to move up.

Notice also that there is a bullish cross and hopefully this will also help to propel the QQQ higher.

Have a great weekend!

November 18 2021

The SPX is trying hard to break into new highs. The previous highs are a resistance area. Some traders may be fearful that a double top may form in the SPX. That is a good concern because tops can happen through the appearance of a double top in the daily chart.

Looking at the 2 hour chart of the SPX above we can see that the index is still in a short term uptrend.

It is above the rising 2 hour 20 MA and 50 MA. This shows us that we should have a bullish bias.

What I want you to take note is the uptrend line in the chart. Watch this uptrend line. As long as the index stays above this uptrend line then we should continue to be bullish on the S&P and it is very likely to make new all time highs.

Things look a bit more positive for the Nasdaq after NVDA reported its earnings. With good earnings I think the stock is likely to pop up. A major semiconductor company doing well is good news for the techs.

Hopefully this will propel the Nasdaq 100 higher.

The 2 hour chart of the Nasdaq 100 shows us that it has broken out of a 2 hour ascending triangle. This is good and we can actually make a target for the breakout.

I have projected the height of the pattern to the breakout to get a short term target and if all things go well, it should have no problem going there. That is because AAPL has also broken out of a daily triangle. Hopefully this will help to propel the techs higher.

The Nasdaq 100 is still above its rising 2 hour 20 MA and 50 MA and we should continue to have a bullish bias on the techs as long as Nasdaq 100 stays above these moving averages.

November 17 2021

The S&P 500 is just a little shy of making another new all time highs. It is already back in a 60 min uptrend and therefore our bias should be to the upside.

Watch the uptrend line that I have drawn in the S&P. As long as SPX stays above this uptrend line there is a big possibility for it to continue to move higher.

There is also a small area of support to watch. I have colored the area green. As long as the SPX remains above this support area, we are very likely to see new highs.

Things still look bullish for the S&P and so far there are no weaknesses at the moment.

Another positive development is that the QQQ has broken out of a 60 min ascending triangle. This is bullish and signal a continuation to the upside. Watch the top of the ascending triangle pattern and as long as QQQ stays above the top of this pattern, we will likely see new highs in the QQQ soon.

This will also be positive for the entire market as a whole.

There is 60 min bullish cross that happened yesterday and hopefully this will also help to propel the QQQ higher.

Let us now take a look at the some seasonality charts. The chart above is the seasonality chart of SPY. The month of November for the past 5 years has been very good for SPY with and average gain of 4.3%.

December is also good for the SPY with a 75% where it closed higher than where it opened.

So do take that into consideration when we look at the charts of the SPX.

November is also a very good month for Basic Materials sector. Which is why you should scan for stocks in this sector for breakout plays.

Another very bullish sector in November is the Industrials sector. So perhaps its a good idea to look for breakout stocks in this sector as well.

November 15 2021

A short term bullish reversal has happened and from the looks of the daily chart, there could be a bullish flag in the making. Not surprising in this bullish environment.

But take note that SPX must be above the lows of the red bar which is the recent low and it must continue to stay above the rising 20 MA. So if that happens, then we could see a bull flag target up north.

November 12 2021

One thing we do know is that the bulls are not giving up that easily.

If this was another month, the correction might be swift and fast. But when you take a look at the charts, the bulls are really giving the bears a big fight.

There is some support at the 4620 - 4630 area and this could potentially serve as a bounce back up area. The SPX drop to that area a few days ago and quickly bounce back up. The SPX is also finding support at the 60 min 200 MA.

What I want to bring to your attention is that the SPX may be forming some kind of a cup with handle. If SPX breaks above the top of the handle, then we may resume going upwards. On the other hand, if SPX breaks below the handle then more correction may come today and perhaps to next week Monday and Tuesday.

There are two trendlines that I want you to take note as well. The blue one (T1) and the black one (T2). The steeper T1 trend line will give us an early signal that the market wants to reverse back up. That will be good if it happens.

But what we want to see is for the SPX to trade back above the T2 trend line. This will give the bulls a more solid confirmation that the market is ready to move back up higher towards the end of the month.

November 11 2021

A correction happens when the index goes up too much. But in this bull market and seasonality we should know that the correction will have a limit. Therefore it is a good idea to spot a reversal back up since there is a high possibility that the markets will continue to move higher towards year end.

In the hourly chart of the SPX above we can see how the SPX tries to break above a downtrend line. If it manages to do so, then we might have a quick resumption of the daily uptrend.

If on the other hand, SPX breaks below yesterday's low then we could be in for a deeper correction.

November 10 2021

One needs to be quite cautious right now of a deeper correction in the S&P. Not because it will have a big crash soon but because it is quite overbought. When an index runs up too much, there is a possibility for it to correct.

Yesterday we saw a 60 min triangle breakdown in the chart of the SPX. There is also a bearish cross and this could signal the beginning of a correction.

We do not know how far it can fall but a gradual correction might happen and then we can have the opportunity to look for bounce back up.

Right now I would advise you to tighten any stop loss and be very very careful when initiating any long positions. Perhaps it might be good not to take any long trades until we are sure the market is going up again.

The SPY has shown some weakness. First of all it has stop making new highs. Secondly it has drop below a low of a previous trading day. It is now sitting at a consolidation support which I have highlighted in green.

But if SPY drops below the support area, then we could see selling down to the 2nd support area which I have highlighted in green as well.

SPY is already below the 60 min 20 MA which means most long trades will not work well. Better not to have any trades on the buy side for short term trades. My experience is that short term buy tends to work well when SPY is above the 20 MA.

If SPY trades below the 60 min 50 MA this could mean some serious correction. So do watch out and be careful.

November 9 2021

At this moment when the stock market is so extended it is best to always take a look at the 60 min trend of the SPY. As long as SPY is above the 60 min 20 MA and 50 MA, I will still maintain a bullish bias.

The thing with us trend followers is we need to follow the trend until it reverses. Support areas along the trend must be watch carefully and as long as the index is above the support area, we will remain bullish. So far I do not see any weaknesses in the SPY yet.

Perhaps it is trading sideways. That is a good thing since a sideways movement can eventually result in it breaking higher.

Since the trend in SPY is up, continue to find continuation patterns in stocks to ride the breakouts.

November 8 2021

Welcome to another brand new trading week where the market may present us with more trading opportunities. If you like the analysis here perhaps you might also like to play breakout stocks. Which I recommend you to put some of the stocks in Stocks To Watch in your watchlist.

Last Friday, the SPX formed a topping tail. This is not a bearish thing in itself but after a very long upward move, it does tell us to be cautious. A candlestick pattern in itself in the daily chart does not show us a reversal of trend but it can warn of a short term reversal.

If a full bloom correction happens, it could bring the SPX back down to the previous high around 4540. This is where it might reverse back up to resume the uptrend and then make new highs.

But that is just an anticipation. As traders we want to be open to all possibilities including the fact that the indexes may not correct downwards but sideways to give us a breakout higher.

At this juncture we should be cautious and any new long positions should perhaps have a tighter stop loss.

The Nasdaq 100 also formed a possible bearish reversal pattern. It is a doji like pattern and for that to appear after a nice move upwards can be a warning that the market may reverse.

If there is any consolidation, I do not want it to break below the line that I have drawn above. That will be lows of the large bullish candle. If that happens, we could see the Nasdaq 100 correct lower.

Now for a look at the long term health of the markets using a combination of moving averages. This is a weekly chart of SPY and the Nasdaq below which uses multiple MAs. I called it my rainbow indicator.

You can see that the MAs are sloping upwards and having train tracks. This is a beautiful pattern and hints to more upwards movement in the long term. So we should continue to be bullish long term and mid term.

It is just that the short term we should be a bit cautious and this is where we need to look at the 60 min charts for guidance.

The 60 min chart of SPY shows us that the SPY is quite extended but it is not bearish yet. It is above the 60 min 20 MA and 50 MA. We do not want to see it drop below the low of the consolidation which I have highlighted in green.

If that happens do be cautious of a correction.

The 60 min chart of QQQ also shows us that the QQQ are quite extended. So far it is still above the 60 min 20 MA and 50 MA. So we should continue to have a bullish bias. But if it drops below the 20 MA, be careful.

November 5 2021

The markets continue to move higher and so far there is still no signs of worries that we should have.

The chart above is the weekly chart of IWM and it has broken out of a long long weekly channel. When small caps do well, and breakout of a long term base, then this is going to be very bullish for the stock market in the long term.

Continue to watch the top of the channel. As long as IWM stays above the top of this channel, then we should continue to be bullish on the US stock market.

The semi sector broke out into new highs and with the semis doing well this is going to be very very good for the stock market. The bullish cross that happened yesterday will also be another factor that can help with the bullishness of the SMH.

There is a very strong consolidation support below which I have highlighted in green. In case of a correction, this area will act as a very strong support and may help SMH to bounce back up.

The SMH looks quite extended right now and we should be quite cautious to look for signs of reversal. So far I do not see any signs of reversal in the semis yet.

Elliot Wave practitioners may be expecting a correction soon. What they can expect is a correction then SPY finding support and bounce back up to make new highs. It may or may not happen following the wave but it is good for us non users of Elliot Wave to know what they are expecting.

The SPY has risen by quite a lot and what can happen can be a nasty correction only to see it bounce back up very fast. So far the moving averages are not telling us anything about a nasty correction.

The SPY is still above the rising 60 min 20 MA and 50 MA. As trend followers we should continue to be bullish as long as SPY stay above these MAs. Do be careful if it starts to drop below the 20 MA and then the 50 MA.

November 4 2021

What a great day it was for the S&P 500, Nasdaq and the Dow. It continues to move higher. When the trend is bullish one should definitely continue to be bullish on it.

First let us take a look at the daily chart of Nasdaq 100. The index is very near its measured move target. Usually a reversal can happen when a target is met but we are in a very strong bull market and so it is very possible for the index to continue to move higher.

If you take a closer look, you might see that there is a possible cup with handle that is happening in the index. If we take the target of the cup with handle then we could potentially see the Nasdaq 100 move way higher than the current measured move target.

A bullish cross just happened and this could add more weight to bullish moves.

Yesterday the SPY broke out higher. You can see how it broke out of a box in the 60 min chart. This is good and the top of the box will be a new support area for us to watch. As long as SPY stays above the top of the box we should definitely continue to be bullish on the US stock market.

Do stay bullish as long as the SPY is above its rising 60 min 20 MA and 50 MA as well.

I do not see any weaknesses yet in the SPY so let us just be simple minded and follow the trend. Stay bullish till the trend changes.

Another development that I want to bring to your attention is that XLB which is the basic materials sector has broken out of a long downtrend line. This is accompanied with a bullish cross.

With trend lines analysis, this tells us that the sector is poised for possible higher moves. As long as XLB stays above the downtrend line then I think it could be bullish for Basic Materials stocks. So if you are looking for long positions you might want to find if there are any long setups in the XLB sector.

November 3 2021

Looking at the 60 min chart of SPY we are still in a rising uptrend. There is still no weakness in SPY so we should continue to have a bullish bias on SPY.

The SPY is still above its rising 60 min 20 MA and 50 MA. The slopes are still very healthy and therefore I do not fear a bigger correction yet.

SPY has not drop below yesterday's low and each day it is still closing above yesterday's low so this is still a good sign. Support at the top of the ascending triangle which I highlighted in green is important.

In the event of any correction, that will be a good support area to watch.

November 2 2021

Today we will be looking at the 60 min charts of the QQQ, XLY and the SMH. This is to gauge the short term trend strength. And when we are done looking at it, you would agree that we should continue to stay bullish on the stock market.

The QQQ which represents tech are still in a nice 60 min uptrend staying above its 60 min 20 MA and 50 MA. I do not see any signs of weaknesses yet in the QQQ. So let us continue to follow the trend and stay bullish.

Since you know that the QQQ is in an uptrend, you should focus on finding continuation patterns in the tech stocks. TSLA was a good one. If you have read my analysis on TSLA you would know that it formed a nice 60 min ascending triangle.

How do we know that QQQ is in a bullish trend? Well, for starters the QQQ made a bullish cross and it has never drop below the lows of the day when the QQQ made the bullish cross. From there it has traded above the 60 min 20 MA and 50 MA most of the time.

There are pauses here and there like a box consolidation above. But that could be a trading opportunity as smart traders can jump into the breakout of the box and put a stop loss below.

The Semiconductor sector represented by the SMH also made a bullish cross and from there it has traded above its rising 60 min 20 MA and 50 MA most of the time.

Semis that are in a strong uptrend is very very good for the stock market. When SMH is bullish we should be very bullish on the US stock market. 

SMH recently made a nice strong support area which I have highlighted in green. As long as SMH stays above this area, we should continue to be bullish on SMH and also the US stock market.

The XLY which represents consumer discretionary is also in a nice uptrend. After making a bullish cross, it moved up and stayed above its rising 60 min 20 MA and 50 MA most of the time. 

On the way it offered many trading opportunities, mainly box breakouts and yesterday an ascending triangle breakout.

I like the ascending triangle as it can offer us a very very good analysis tool. When the index breaks above the top of the ascending triangle, this represents continuation of the bullish uptrend. The top of the pattern will also be a new support.

As long as XLY stays above the top of this pattern we should be bullish on the XLY and very bullish on the US stock market.

November 1 2021

November is usually a good month for the stock market. And looking at the charts, they seem to agree with this fact. So, we could continue to be bullish and trade stocks on the long side.

The SPX has broken out into all time highs and it also broke above the previous high. The previous high is now a new support which I have highlighted in green. 

As long as SPX stays above this area, then we can expect more bullish moves to the upside.

Notice how there is a bullish cross as well. The last time a bullish cross appeared was in October 2020 and SPX went up by quite a lot from there. So if history repeats itself then we could see some really bullish moves.

SPX also broke above a 60 min ascending triangle. So this is bullish. As long as SPX stays above the top of the pattern, then we should continue to be bullish.

SPX is still above the 60 min 20 MA and 50 MA so short term wise we should still be bullish. It is above the rising 60 min 200 MA and this adds more bullish bias on SPX.

Have a great trading week ahead!

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