Global markets did not rest easy during the U.S. Thanksgiving holiday last week. The S&P 500 declined nearly 4% from an all-time high around $4,700, while the CBOE Volatility Index (VIX) spiked to its highest level since September. Despite the immediate turmoil, our indicators remain in moderate risk-on mode. And some of our leading metrics such as the VIX/SPY and copper/gold ratios are stabilizing.
From a technical perspective, the S&P 500 is holding short-term support above its 100-day moving average. For now, market downside appears to be limited, especially given seasonal strength, which typically benefits sectors such as homebuilders, retail, and biotech in December.
Still, we expect the S&P 500’s uptrend to continue to narrow over the next few months. Structural weakness such as declining breadth (less stocks participating in the broader uptrend) and slowing price momentum has persisted throughout the year. This is one reason why indicators remain moderate instead of aggressive heading into the new year.
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S&P 500 holds support within narrow uptrend
Source: Cannon Advisors, TradingView data