What happened in the market?
It has been an exciting time in the market. We have experienced such a resilient bull market that continues to make new highs. There were some very significant earnings reports from the biggest companies in the world such as Microsoft (MSFT), Advanced Micro Devices (AMD), Apple (AAPL), Amazon (AMZN), and Google (GOOG) (GOOGL) amongst many others. MSFT and AMD managed to post great earnings with MSFT taking AAPL's crown as the highest valued company in the world. The market managed to ignore some setbacks such as a poor GDP report and bad earnings miss from heavyweights AAPL and AMZN. On Friday afternoon, the market managed to climb higher into the close on strong volume. This typically indicates continuation to the upside.
1-day 3-minute Chart: Strong uptrend on heavy volume towards Friday's close in the S&P 500 (SPY).
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1-year 1-day chart: SPY new All-Time High at 459.56
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Will the market continue rallying?
As previously mentioned, the market has been so resilient that it is hard to say that it will not continue higher. It is my opinion that the market will more than likely have more temporary upside but has to pull back soon. It has been in an incredible 3-week run that it looks overextended at this point. On the flip side, the bull case is that more than 80% of the reported earnings have been incredibly outstanding with record-breaking profit margins. If this week's earnings reports from Pfizer (PFE), Moderna (MRNA), Uber (UBER), Square (SQ), Airbnb (ABNB), T-Mobile (TMUS), and other big companies continue to report huge earnings then there is no reason for the market to not have continued momentum.
What other factors can impact the market?
Other important factors that can impact the market are the Infrastructure Bill agreement, Jobless Claims report, CPI report, and other economic data. If the government is able to reach an agreement on the infrastructure bill I believe that the market will continue to rally and will give life to the green energy sector. On the other hand, bad Jobless Claims and CPI reports will affect the economic recovery outlook, at least temporarily.
What does the Infrastructure bill entail?
The part that interests me about the bill is that it will target the largest clean energy investment in United States History. As a trader/investor we want to take advantage of the opportunity to capitalize on this movement. Some of the key companies that will benefit from the historic investment are NextEra Energy (NEE), Clean Energy (CLNE), Sun Power (SPWR), First Solar (FSLR), Plug Power (PLUG), Blink Charging (BLNK), Lucid Motors (LCID), FuelCell Energy(FCEL), and many more.
What other events are happening?
The COP26 Summit which is a climate change conference event where the world's leaders coordinate to reduce carbon emissions is taking place in Glasgow and will run till November 12, 2021. This Summit falls in line with the infrastructure bill and will put in the spotlight the aforementioned clean energy companies that might benefit from the move out of fossil fuel reliance.
by Jose Navarro on October 31, 2021
**This newsletter is not financial advice, it is intended for educational and entertainment purposes only. Pennystocksclub13 intends to educate beginner traders with easily accessible and simplified information to shorten the learning curb. Traders should always do their due diligence and continue educating themselves about the risks involved with trading.
All charts courtesy of Thinkorswim platform. Pennystocksclub13 is not affiliated with Thinkorswim.
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