Pros And Cons

The largest negative factor in the market is sentiment. The number of bulls has reached multi year highs on both the Investors Intelligence and AAII survey. Even with the recent large pullback, there has only been a slight decrease in bullishness. Secondly, there has been a lot of stock issuance in the past two weeks totaling well over $30 billion.

On the positive side the market will be oversold next week and we are heading into a seasonally strong period. Thanksgiving followed by the turn of the month will give the bulls a seasonal tailwind. Additionally, there has been a pickup in M&A activity.

I believe this means that if we do get one more move lower in the next few days it can be bought through early December. But its unlikely to be a great rally given the high level of bullishness.

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