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Technical Analysis

US Stock Markets Update

by Antonis Benis, on Dec 11, 2020 4:13:36 PM

Stock markets are following seasonality loyally lately. It suggests a bottom on December 2nd, a top on December 9th followed by a correction into December 15th and 20th, followed by the rally into the first half of January (presidential election cycle, see chart 1).

DOW JONES - seasonality

Courtesy of Seasonax

NYSE Advance/Decline line is still making new highs, no divergence there.

S&P registered a daily sell setup on Monday, started a correction. Dow 30 finally reached the major Gann resistance level at 30142/30276, mentioned in my last report (see chart 2).

DOW 30 - GANN weekly

Any downside now, needs to hold around the lower Keltner channel to be constructive.


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TD monthly sell setup for the S&P at 7, Nasdaq 100 has a qualified monthly sell setup 9.

Put/call ratio at record low levels; in the past this kind of readings led to corrections/consolidations in the markets; market sentiment at extremes.

I made a monthly chart of S&P 500 500, using only major long term cycles (3+ years). It tends to catch the bottoms accurately, however the suggested tops are premature. Still, I do expect a major top in the first quarter of 2021 and a major buying opportunity in the third quarter of 2022 (see chart 3). For now, positive seasonality, starting next week, is hard to ignore/bet against it.

TS- S&P monthly

This is the last post for this year, next one will be in the first week of January. I wish you a wonderful holiday and happy new year.


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Topic:Trading SignalsAsset AllocationInvestment StrategyDow JonesAnalysis and StrategyUS Stock MarketStock Trading
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