Broker Check
Market Update 11.16.2020

Market Update 11.16.2020

November 19, 2020

Today is Monday November 16 and it is 11am.

As the market continues to progress, the trends remain our friends. All major averages are trading above the short, intermediate, and long-term trend lines. The Dow and the S&P 500 averages are playing catch up to the Nasdaq as the emergence of a Covid-19 vaccine has generated renewed interest in many of the out of favor pandemic lagging stocks. The Dow and the S&P 500 are finally on the verge of breaking out to new high territory while the Nasdaq broke to new high territory back in June. Fortunately, our investment strategy and models are weighted nicely in the sectors that have been unaffected or even actually benefited from Covid-19 in large. Consequently, we are having one of our best years since I started in this business 33 years ago. This is explained by the bifurcated market we have been experiencing.

My observation at this point is that the Dow and S&P 500 oriented stocks have generally suffered and lagged due to Covid-19. On the other hand, Nasdaq oriented stocks have generally continued to grow and in some cases benefited from Covid-19. I continue to like how we are positioned. The green line is the Nasdaq, and the Red and Blue lines are the S&P 500 and Dow averages, respectively.

Now, several pundits are trumpeting the seeming rotation away from growth and into value. As you know, over the past 10 years, this theme has been erroneously promoted almost every year. Over the past few trading sessions, the Dow and the S&P 500 have outperformed the Nasdaq. Naturally, I will be monitoring carefully to see if this actually develops into a new trend. To this point, it is just normal market action and rotation.

As always, thank you for your continued support as well as your referrals. Let us know if we can help with anything financial.