Bearish November Omen

Today 11/30/21 the S&P 500 (SPX) ended the month of November 2021 down 0 .94%.  November is seasonally the most bullish month for US stocks – meaning  it closes November higher than the open.  From 2002 to 2020  the SPX November record  is  up  fourteen times  and down five  times,  a ratio of 5/19 or 74% up, 26% down.

The monthly SPX chart courtesy of Trading View illustrates  three of the down Novembers.

Two of the five  down Novembers  came during the worst US stock bear market within the last fifty -years.  The  other three  bearish Novembers from 2002 were only marginally down.

The daily SPX chart  illustrate one of the potential Elliott wave counts since the early October 2021 lows.

This wave count begins at  the slightly higher 10/06/21 bottom not at the primary bottom made on 10/04/21, which implies the supposed Intermediate wave (4) was  truncated. The problem with truncated waves  is that they usually can’t be confirmed until well after they’ve formed.  In this  case it would happen if the SPX failed to exceed the 11/22/21 high and then goes below the 10/04/21 bottom.

If this  is the true Elliott wave count,  it means a  major SPX peak could be in place  implying at least a multi-month decline.

On the bullish side of the coin, the SPX high made on 11/22/21 was not near a major Fibonacci price point.  The  Fibonacci time  forecast is  based upon a  Fibonacci 21 – months since the March 2020 bottom.  There is no leeway when using Fibonacci sequence numbers.  November 2021 is  20 – months and is not a  Fibonacci sequence number.

If the SPX rallies  into December 2021 and peaks in the  4860 to 4890 range  the Fibonacci time/price  targets could be realized.

On an  hourly chart the move down from the SPX 11/22/21 high  looks corrective, if the 11/30/21 bottom holds  it implies  the next rally could reach at least  the 11/22/21 high.

When markets  have counter seasonal moves they can sometimes  be warnings of a major trend  change.  This was what happened with a down November in 2007. 

As we enter December 2021 the evidence does not yet indicate the US stock bull market is dead.  It does appear to be severally wounded.   

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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