Stock Market Rally Getting Stretched As Buying Continues

stock market indices rally election analysis image investing november 5

Stocks are showing bullish patterns on their Market Forecast patterns but the late pullback from intraday highs suggests we may have seen the short-term high as participants view how much courts get involved in the election process and how that impacts currently high market volatility.

Today is part of a strong multi-day move that still hasn’t shown to be a breakout move quite yet.

Weekly Heikin Ashi candle shows a strong transition candle after only one week, which usually means we have some more “noisy” transition weeks to follow before a new trend can take hold. Many oscillators are showing bullish signs, but again not bullish enough to expect a bullish breakout move.

Volatility dropped sharply at the open but stayed relatively high, which suggests we can still expect bigger moves going forward, which tends to coincide with more volatility – especially with the S&P 500 Index INDEXSP:.INX not breaking out into a new trend yet.

Big surprise downward move in long-term yields suggests we may be in for some more volatility in the short-term before a new intermediate trend develops. Most major economies are showing bounces off strong oversold conditions, but have not come close to testing their respective October 12 highs – which would signal a breakout to a new bullish move higher.

Technology, Communication Services and Discretionary reminded everyone again today that when stocks are set to make strong moves higher, it will be led by these three sectors – particularly the individual behemoths inside each of them.

Get market insights, stock trading ideas, and educational instruction over at the Market Scholars website.

Stock Market Video for Traders – November 5, 2020

Twitter:  @davidsettle42  and  @Market_Scholars

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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