Year-end rally has started – how far can it go?

Last Updated: 17. November 2023By

Last week we saw strong price increases on the stock exchanges. Several positive events came together.

The latest US inflation data for October surprised positively. Inflation and interest rate increases should no longer be a major topic for investors at least in the coming weeks.

On the other hand, the US government had agreed with the opposition on an emergency budget to avoid a government shutdown. You remember: the topic haunted the media from time to time in the past months and temporarily also weighed on stock prices.

Both negative developments now seem to be off the table. The markets reacted very relieved. But will the joy last long?

I think yes! Because from a chart technical point of view, the S&P 500 has clearly broken out of its correct downward trend from autumn to the upside.

This has triggered the year-end rally! The rally started, by the way, only at the very last moment. This is certainly due to the fact that monetary policy has dominated the market. But it also has to do with 2023 being an election year.

In such years, the market is more volatile from summer to the end of October. However, the year-end rally also starts at the beginning of November in these years, but it initially runs a bit more slowly.

Now the market can finally run wild again. Until the next major news event (the interest rate decision in December), more than four weeks will pass. During this time the rally can unfold.

I see the minimum goal of this movement clearly above the previous yearly highs at 4,607 points. If we are already there, the previous all-time high of the S&P 500 from the beginning of 2022 at 4,819 points should also be tested.

In any case, you should definitely be part of this profitable rally now. And with US individual stocks, which can bring you much higher profits than the boring index.

We have many very strong and active stocks in our portfolios, many of them already at yearly or even all-time highs and almost all better than the index.