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12/1/23 Your Complete December Outlook

News:

The latest inflation data show continued cooling.

  • Core PCE rose +3.5% since last year
  • That’s in line with projections
  • And the lowest reading in more than 2 years
Chart from ForexLive

The indexes leaned green with large caps leading the way…

  • Dow Jones +1.5%
  • Nasdaq -0.2%
  • S&P 500 +0.4%
  • Russell 2000 +0.3%

Sector Round Up

9 of the 11 sectors closed Thursday’s session higher.

At the top…

  • Healthcare (XLV) +1.3%
  • Financials (XLF) +1.1%
  • Industrials (XLI) +1.1%

Risk-on stocks were the losers…

  • Consumer Discretionary (XLY) -0.1%
  • Communications (XLC) -0.6%

Technicals: 

The Dow Jones closed at a 52-week high on Thursday. It’s also the most overbought it’s been in over a year…

DIA Daily Candles – Chart from thinkorswim

The other major indexes aren’t too far off their 52-week highs.

Historically, the elevated RSI levels have never been maintained. We’re expecting a short-term pullback soon.

Your latest readout…

Timing:

Today is the first trading day of December.

Here’s what to expect in the month ahead…

  • For the main three indexes, December is typically the 3rd best month
  • It’s the Russell 2000’s the second-best month
  • The average Pre-election year return for the S&P 500 is +2.9%
  • For all years, it’s +1.5%

Mark your calendars for these highlights…

  • 8th – Jobs report
  • 11th – Watch for the January Effect to start
  • 12th – CPI inflation data
  • 13th – FOMC Rate Decision
  • 15th – Triple witching
  • 19th – “Free Lunch” picks revealed
  • 21th – Final Q3 GDP
  • 22nd – PCE inflation data
  • 22nd – “Santa Rally” begins
  • 25th – Markets closed for Christmas
  • 29th – Last day of trading for 2023

Watchlist:

*Low Float
^Open Position

*DRCT support at $10, resistance at $12.50
*GYRE on watch
*SHOT support at $4, resistance at $5
HRTG support at $8
HNST support at $2, resistance at $2.5

Secondary watchlist—float about 100 million

NMRK support at $8
GPS on watch
AFRM on watch
SID support at $3.20

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