The Market Is Overbought And Might Consolidate

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In his Daily Market Notes report to investors, while commenting on the overbought market, Louis Navellier wrote:

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Overbought Market

I have to tell you that you can have too much of a good thing. Obviously, this week has been stunning for stocks. It's largely propelled by very strong earnings. And when big flagship stocks like Nvidia take off, it really does help portfolios, because that's been a big wait for some time. But we are overbought now. And I expect that we're going to stay overbought through Thanksgiving. I've been through this cycle many times. The second week of November you can back and fill a bit, but we still have some good earnings due to come out. So, hang in there. Don't let any backing filling bother you.

We're back in the Gogo 90s. I'll be honest with you. And that was one of the best periods we've ever had for stocks. The melt-up you're seeing is just because where else do you go? Some regional real estate bubbles are starting to be pricked which is part of the Zillow problem. However, the stock market is clearly the best inflation hedge. Sales and earnings are going to go up a lot more in an inflationary environment.

And as you look around the world, the US is still an oasis. We're the only major country with positive growth rates other than China. But let's face it, China is a mess right now. Their property bubble got pricked and there are covid problems. We're going to have to ensure a lot more of our manufacturing long-term, obviously, because of all the supply chain glitches. So a lot of things look very positive for the US, Mexico, and Canada.

Money Reshuffled

Obviously, Apple Inc (NASDAQ:AAPL) and, Inc. (NASDAQ:AMZN) missed, but they regrouped. There is a lot of money being reshuffled right now, and I'm just shocked at the strength of the small-cap stocks. I've been through this many times. I've seen these melt-ups before, but money does not leave this market. It gets reshuffled.

We're overbought and we might consolidate a little next week. And then we're going to rally into Thanksgiving, which we normally do. November is often an incredible start. If we're going to have serious consolidation, it will be sometime in early February as the fourth corner announcement season winds down.

So hang on and enjoy the ride. Our best defense is a strong offense, and it's every stock for itself.

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Heard & Notable

An average of 170 million people across six regions will be subjected to internal migration by 2050 if the trajectory of high greenhouse gas emissions and unequal development continues unchallenged. Approximately 71 million people will have to migrate in the confines of the African subregion due to slow-onset climate change. Source: Statista

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