To The Moon

On Thursday (14 Nov), stocks experienced a slight pullback, with the S&P 500 closing 0.60% lower. The market has continued to fluctuate after its record-breaking rally fueled by the presidential election and an FOMC interest rate cut.

Probabilities For Dec Rate Cut Of 25 Basis Point Drop Significantly

Data on Thursday (14 Nov) Morning on wholesale prices and jobless claims came in largely as expected. Federal Reserve Chair Jerome Powell, in his first appearance since the central bank cut its benchmark rate last week, expressed confidence inflation would continue to decline toward the Fed's target, but that the path would be "sometimes bumpy." The economy, he added, "is not sending any signals that we need to be in a hurry to lower rates."

If we looked at the FedWatch, the probabilities of a 25 basis points cut in Dec have dropped from 82.5% one day ago (Wednesday) to 60.6% (Thursday) after the latest Producer Price Index report revealed that wholesale prices increased in October at their steepest rate in three months and Fed Chair Jerome Powell said there was not a "hurry" to cut interest rates.

AAII Investor Sentiment Survey Bullish Despite Pullback

Last week, the investor sentiment improved again, as shown in the Thursday’s AAII Investor Sentiment Survey, which reported that 49.84% of individual investors are bullish, while 28.35% of them are bearish.

 VIX Continues Moving Along 15 

The VIX index, a measure of market volatility, declined by over 20% last Wednesday, moving back below the 20 level and nearing the 15 level. This confirmed risk-on sentiment and a lack of fear in the market. It has since moved sideways.  

Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.

We saw $Cboe Volatility Index(VIX)$ went down to 13.62 on Thursday at the low, before closing at 14.31 with 2.07%, this could signal a reversal soon.

Mega-Cap Technology Stocks Mixed. Opportunities Still There

Mega-cap technology stocks were mixed. AI investor favorite $NVIDIA Corp(NVDA)$ , Microsoft (MSFT), and $Apple(AAPL)$ gained ground with 0.33%, 0.40% and 1.38% respectively, while Amazon (AMZN), Alphabet (GOOGL) and Meta Platforms (META) retreated with -1.22%, -1.84% and -0.49% respectively.

$Tesla Motors(TSLA)$ slumped more than 5% amid reports President-elect Trump's transition team is preparing plans to scrap the $7,500 electric vehicle tax credit.

So I would think that there are still strength from the mega-cap and also tech stocks, the pullback might be due to profit taking and consolidation.

I am still holdin onto my NVDA stock as i see this stock would have more potential upside move after their earnings next week.

Summary

Despite the slight pullback, we are seeing investor sentiment still bullish, this could show that the pullback is temporary, as investors I would continue to stay invested in the market.

This is because the defensive stocks have shown that some of them are still continuing to perform. This might be something we could be looking at.

Appreciate if you could share your thoughts in the comment section whether you think investors should stay invested despite market pullback.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.