US indices are rebounding strongly after retracing to support levels near October lows.
The Dow Jones and Russell 2000 are leading the rally, with the Dow reaching new all-time highs and the Russell 2000 close to its November 2021 peak of 2,463. The market range is expanding, allowing other indices, including those influenced by the magnificent seven, to recover.
US 30 daily chart with ATR (14), CMC Markets platform 18/11/24
Market breadth is improving, with no signs of overbought conditions. The market appears aligned with the traditionally favourable Thanksgiving and Christmas seasonal trends. According to the latest Investors Intelligence sentiment survey, the percentage of bulls is at 60%, more than triple the percentage of bears (18.3%). Meanwhile, option hedging is decreasing, with fewer puts and the put/call ratio at its lowest since December 2021.
US NDAQ 100 daily chart with MACD, CMC Markets platform 25/11/24
Price is everything, and if resistance levels break and indices rise further, upward projections could come into play. For the S&P 500, surpassing 6,027 could cause the index to target 6,134.
US SPX daily chart with ATR (5), CMC Markets platform 25/11/24
The only big data release this week that could make the market choke on its Thanksgiving turkey is tomorrow’s US personal consumption expenditures (PCE) report for October 2024, due for release at 3pm (UK time). The Fed’s preferred inflation measure is expected to have increased 2.3% in the year to October, up from 2.1% in September; if inflation rises too sharply, it could spark concerns about a new wave of inflation.
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