Curt Renz Capital Resources

Stock Market

Market Outlook
On Thursday the popular averages closed narrowly mixed. Nevertheless, the Nasdaq Composite reached all-time intraday and closing highs. The S&P 500 tagged an all-intraday high, but closed slightly down. The averages pulled back from the day's highs after Pfizer (PFE -1.7%) announced reduced early shipments of its Covid-19 vaccine due to difficulties with supplier materials.

   Tesla (TSLA +4.3%) achieved an all-time closing high. Goldman Sachs upgraded it from a Hold to a Buy, and raised its price target from $455 to $780. I own Tesla shares.

  Above is my three-month chart for the S&P 500 ETF (SPY). The SPY's 50-day simple moving average proved to be supportive at the session's low on September 11, with continuation upward during the first two days of that week. Then the SPY resumed dropping and fell through its 50-day SMA at the end of that week. As September transitioned into October, the SPY fluttered around that SMA. Then it soared above for four trading days before giving most of it back.

   The SPY's 50-day SMA gave way on October 26  during a big selloff amid heavy trading volume and an elevated VIX. The dumping continued into the end of the month. Market bottoms often occur in late October, setting up a run into April. The panic selling amid heavy trading volume in late October may have been a precursor of a significant bottom.

   The nice up move on November 2 amid more bad pandemic news turned my outlook arrow green. The continuation pushed the SPY well above its 50-day SMA, leading to an all-time closing high on November 16. After that there was hesitancy that had me cautious. But holding at or near earlier tops, along with good news on vaccines and the presidential transition restored my arrow to green. The SPY reaching all-time closing highs several times recently including Wednesday affirmed that decision.
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