November 9, 2021, 6:44 pm EST
Pullback At Top
The stock market experienced a minor pullback from the record top levels today. All major indexes retreated between -0.3% and -0.6%.
At the first glance, it did not seem destructive. Only a few big names drop big: TSLA -12%, PYPL -10%.
In fact, there are some industries that performed well today:
- Home Builders: DHI, PHM, LEN, NVR, MTH, CVCO, TOL, SKY
- Retailers: DDS, MAKSY, AMZN
- Network Security: S, CRWD, DDOG
From the technical analysis point of view, the pullback may continue for the next few weeks in order to digest the big gains (between +8% to +12 %) accumulated in the past 5 weeks. We will monitor continuously to determine if the pullback is just a pullback or turn to a top-out.
Here are some bullish and bearish points to consider.
- Economic re-opening
- Infrastructure bills
- Effectiveness of vaccines and drugs for the COVID-19
- Job market recovery
- China housing troubles spread to the US
- Threat of hyperinflation
- Rising interest rates and tapering on the bond purchase
- Supply chain interruption
As we can see from above that both sides have reasons to hold their viewpoints. We simply need to watch closely on the development for the next few weeks to determine the impact of these factors.