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Weekly market wrap-up Nov 2

Indexes up about 2.5 percent for the week. Long-term trend on the chart for the SP 500 is still long.

Index Oct 26 Nov 2 +/- %
S&P 500 2658.69 2723.06 + 64.37 + 2.42%
Nasdaq 7,167.21 7,356.99 + 189.78 + 2.64%
DOW 30 24,688.31 25,270.83 + 582.52 + 2.35%

A short-term chart (60 min) indicates a sell on Oct 18 and a buy on Oct 31. However, the first sell signal on the 60-minute chart came on Oct 4 (not shown). At that signal, the SPY was at 290, and a new buy signal did not come until Oct. 31, after a drop of 31 points, or  nearly 11 percent. 

From Investor's Business Daily: 

The week left investors with three realities to consider.

No. 1, this pullback is resolving doubts in favor of the bearish interpretation. Consider how the nonfarm payrolls blowout was turned into a negative.

Jobs added came in at 250,000, about 30% more than expected and above the entire range of estimates.

The pessimists shifted their focus to wage gains and fears of inflation in order to stay negative.

No. 2, sound investing rules are proving their worth. On Thursday, stock action came close to a follow-through day. But close isn't good enough in investing. Wait for the stock market to deliver a legitimate confirmation.

Investors can congratulate themselves if they raised cash when the uptrend came under pressure Oct. 4 and raised more cash when IBD switched its outlook to correction Oct. 10.

The cash shouldn't come off the sidelines until a new uptrend is confirmed.

No. 3, pockets of strength exist. According to preliminary data, the cement stock group gained 12% for the week. This is a play on a possible House win for the Democrats in the midterm elections.

While Trump and a Democrat-controlled House could lead to gridlock, infrastructure is one area of agreement.

The midterm elections are on Tuesday.


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