According to the seasonal experts, there is a tendency for markets to be strong into the US thanksgiving weekend—meaning the upcoming weekend, and then to pare back a bit of those gains the following week or so. This typically leads into a strong December.
If you are like me and still hold a bit of cash, there are some really attractive charts that might just be a good addition to a portfolio, should markets pull back a bit later in the month. Here are a few I am watching
US small caps
The Russel 2000, as represented via the IWM ETF, broke out recently. A small pullback to $127 will be ideal, but I won’t wait too long to buy into this market-cap “sector” (it’s not actually a sector)– whether it’s though an ETF or a number of attractive stocks. Seasonality is strong for small caps over the winter.
Freeport (FCX-US), BHP (BHP-US) and Rio Tinto (RIO-US) are some of the widely traded copper intensive stocks on the market. The charts look fairly similar for all of them, and they look like they’ve put in a bottom. Some, like FCX have yet to break through a neckline, while others, like BHP and RIO look to have broken through. A small pullback over the post-Thanksgiving week by the stronger candidates might be a good entry point for these stocks – although some look to have pulled back enough for consideration of purchase at this time.
The US healthcare index shows a range-bound pattern for this sector. As discussed in my blog here, there are profits to be made in such patterns. It looks like the bottom has once again been successfully tested. Look for an entry point now or, on a small market pullback if the Thanksgiving pattern noted above occurs. Healthcare can be strong into late January from its own seasonal patterns.