Weekly Stock Market Update & SPY Technical Analysis
November delivered the best stock market performance of the year, fueled by a post-election surge following Trump's victory. The S&P 500 reached a historic milestone, surpassing 6,000 for the first time, while the Dow and Russell 2000 also hit new records. Notably, capital rotated out of semiconductor stocks and into sectors like financials, construction, and materials. Although the sharp decline in semiconductors caught many off guard, the pullback is a healthy sign for the broader market. Bull markets need diversification, and spreading capital across various sectors enhances market breadth and sustainability.
Looking Ahead: December's Market Outlook
As markets enter December, investors are anticipating the “Santa Rally,” a period traditionally characterized by strong gains. This week’s spotlight will be on the U.S. labor market, with multiple key reports providing insights. The most critical release is Friday’s U.S. Unemployment Rate, expected to hold steady at 4.1%. Recent increases in unemployment, which has risen from 3.7% to over 4%, have stoked concerns about labor market weakness. The Federal Reserve is closely watching these developments, as they will significantly influence monetary policy and interest rate decisions.
SPY Technical Analysis:
SPY closed last week at a new all-time high, breaking above the 600 level for the first time. While the index appears overbought, market momentum suggests further gains are likely in the coming weeks. If a pullback occurs, buyers are expected to step in as long as SPY holds its critical support range of 580.00–585.00. The options market is pricing in a potential move of ±$19.20 over the next 30 days, indicating the possibility of continued volatility through year-end.