11/16/2018 Weekly Update: Holding Pattern

11/16/2018 Weekly Update: Holding Pattern

by Zach Marsh on Nov 16, 2018

Weekly Recap

S&P 500                -1.45%

10 Year Treasury   +0.97%

Gold                      +0.96%

Volatility              +6.3%


Weekly Update: Holding Pattern


Last week, I mentioned that the test for the market wasn’t if it would bounce from the October lows, but rather how it would respond when the initial bounced faded.  At the time of writing last week, the S&P 500 sat at 2782.  I mentioned then that there would be two critical testing levels for the market to try and hold.  The first level was softer support at 2750, with the major support being 2700.  If the market were to close below 2700 I felt that there could be a lot more downside in store.  Thursday the market attempted a test of that level, dipping briefly below it, before bouncing substantially.  Thursday the market closed at 2730, rallying over 50 points from the bottoms. 

Today, in what will likely be the last active trading day before the Thanksgiving holiday, the market again opened weak, but again managed to rally.  However, the 2750 level, which provided support when the market was above it, now is proving a resistance level.  For the market to regain the footing it lost at the end of September we will need to see it take out major resistance at 2815.  Should this occur, it is conceivable that we could finish the year strongly, with maybe a decent 4-5% rally from our current levels.  On the other hand, if we close below 2700 I would suspect the market will finish the year at, or below, the February lows of 2550 (7% lower than current prices).  So, even though next week will be a light volume, holiday week, I would suspect that it could very well determine the outcome for the remainder of the year. 

Next week, due to the holiday, there will not be a weekly letter.  We, at Calibrate, would like to wish all of you a Happy Thanksgiving and thank you all for your wonderful support over the last year. 

Thanks for reading,

Zach and Dave

Calibrate Wealth





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