November'24
Happy Monday,
Today’s piece is an excerpt from the November RoadMap report that was sent to Professional clients last Friday.
The FULL Roadmap piece contains monthly breadth and performance figures for our 170 ETF universe, as well as commentary and recommendations on a dozen of the most important long-term charts for this month.
We’ll be back later in the week post-Election and the FOMC decision.
Best, Frank
SPX – Key Monthly Stats – October
1.0% monthly loss
Down 12/23 trading days
Negative breadth 14/23 days
Closed above mid-point 14/20 days
Avg. daily gain +50bps
Avg. daily loss -49bps
ONE 1% gain
TWO 1% declines
Patterns
It was a quiet month for patterns in October, with no upside or downside targets being achieved. We started the month with three live bullish formations and ended with the same ones still in play. Of course, the breakout zones of the two most recent ones are a lot closer after yesterday’s big decline. All three appear below.
An early focus for November will be whether the 1.9% decline from 10/31 will lead to more downside, and more importantly, an identifiable topping pattern.
Monthly
The SPX’s latest five-month winning streak was snapped with yesterday’s large loss. The index ultimately logged a clear monthly negative reversal, which comes after two straight positive reversal months. The last monthly losing streak happened from last August-October when the SPX fell three straight months.
Weekly
Here’s an updated view of the weekly channel we discussed in yesterday’s video. The SPX, once again, has encountered some turbulence after hitting the upper line. Another significant point is that the index has spent very little time below the lower half of the long trading channel. If/when that changes, it would be noteworthy.
Seasonality
Needless to say, the SPX underperformed its historical 20-year average in October… after outperforming in both August and September. The SPX has performed best in November (by far) over the last 20 years, with an average move of +2.2% and a win rate of 75%.
November – Best Month in Election Years
Jeff Hirsch of Stock Trader’s Almanac reminds us that November also has been the best performing month in an election year for the S&P 500 and DJIA since 1950. But it hasn’t been as kind to the NASDAQ, with November being only the SEVENTH best month. That said, the NASDAQ’s win rate in November has been better than the SPX (69% vs. 61%).
Nov-Jan – The best Three Months of the Year
Looking further out, according to Ryan Detrick of Carson Group, the November-January three month period has been the best three months since 1950.
Monthly Breadth & Performance
In October, the SPX had its least amount of advancing stocks (35%) since June (also 35%). The number of names down at least 10% (47) was the most since April (113).
