top of page
Search

Technical Report for the Week of 11/16/20


Equities – SPX has been confined to a 2-to-3 months trading range between 3,209.5-3,234 (9/24 and 10/30/20 lows and 3,588-3,646 (9/2 and 11/9/2 all-time highs). The trading range is nearing a critical phase. A convincing breakout above 3,588-3,646 suggests SPX targets to 3,967-4,082 (triangle breakout target), intermediate-term, and then to 4,595 (Aug 2002 V-breakout projection, long-term. Initial support rises to 3,511-3,521.5 (Sep 2020 downtrend and 11/9/20 gap-up), and below this to 3,389.5-3,405 (11/4/20 gap-up and the 50-day ma), 3,330-3,336 (9/28/20 and 11/3/20 gap-ups), 3,209.5-3,234 (Sep/Oct 2020 lows), and then 3,116-3,140 (7/9 low and 200-day ma).


Fixed Income – The 30-year US yields (TYX) and the 10-year US yields (TNX) temporarily diverged during Apr-Aug 2020 via a higher-low in TYX and a lower-low in TNX. Since Sep 2020, a series of higher-lows suggests the return to its direct historical relationship. Recent breakouts above 1.67% (TYX) and 0.94% (TNX), if sustained, reaffirm rising US interest rates, at least from an intermediate-term perspective. TYX’s next key resistance is at 1.840%, 2.14%, and then 2.35-2.45%. TNX next key resistance is at 0.989%, 1.171-1.266%, and then 1.353-1.487%.


Commodities – CRB Index continues to struggle to clear the top of its trading range between 142.46-142.59 (key support) and 154.65-155.69 (key resistance). WTI Crude Oil has once again failed to break out above pivotal intermediate-term resistance at 43-45. The key initial support is 39 (10-wk ma), 36-37, and then to 33.64 (11/2/20 low). Gold continues with its near-term consolidation. Key initial support is 1,845-1,859, 1,770-1,790, and 1,672-1,695. Key initial resistance is 1,911-1939.5, 1,966-1,984, 2,001-2,025, and then to 2,089.20 (8/7/20 all-time high).


Currencies – US Dollar (USD) continues to send out mixed signals. On a near-term basis, a 3-mo head and shoulders top pattern warns of technical weakness. Violation of neckline support at 91.75-92.46 warns of the next decline to 88.71-89.08. The key resistance is 93.97-94.33 and then 94.79. EURUSD remains confined to a trading range between 1.1605-1.1613 (key support) and 1.19-1.1917-1.1920, 1.1966, and 1.2012 (resistance). JPYUSD has rebounded from the key initial support at 0.9424-0.9463. The key initial resistance is at 0.9599-0.9615/0.9692.


S&P 500 Sectors – In the past eight weeks ending on Nov 9, 2020, the S&P 500 sector rotations continue to favor the defensive sectors. Consumer Discretionary (XLY 6.9%) and Technology (XLK 8.7%) continue to correct within the Weakening Quadrant. Communication Services (XLC 9.4%) has now joined Energy (XLE 2.5) in the Weakening Quadrant. Materials (XLB 5.0%) and Industrials (XLI 9.3%) retain their leadership roles within the Leading Quadrant. Healthcare (XLV 6.7%), Utilities (XLU 13.9%), Real Estate (XLRE 6.0%), Consumer Staples (XLP 6.7%), and Financial (XLF 10.1%) continue to improve within the Improving Quadrant.


To view the entire report go to the Reports tab on the website or click the following:



59 views0 comments

Recent Posts

See All

Closing of the Newsletter

Dear clients, After four rewarding years, the time has come for me to close the Lee Technical Strategy Newsletter, effective today. I want to take this opportunity to let you know what a great honor a

Technical Review of the Top 25 NDX 100 Index Stocks

NASDAQ 100 Index (NDX) – NDX is a modified market capitalization-weighted index comprising 100 of the largest non-financial companies on the NASDAQ Composite Index (COMPQ). NDX is heavily weighted tow

Comments


bottom of page