Stockton: "Exhaustion" Hits Strong Market Uptrend, Stay Mindful of Pullback Potential

Market Overview - The S&P 500 has shown a strong uptrend supported by the rising 20-day moving average, indicating a favorable technical setup as it heads into Q4 [2][6] - There are signs of upside exhaustion, suggesting the S&P 500 may experience several weeks of corrective action [3][6] - The recommendation is to hold existing positions that have maintained the rising 20-day average while waiting for a consolidation phase before adding new positions [4] Concentration Risk - The concentration risk in the market is significant, particularly with the dominance of a few large technology stocks in the S&P 500 and NASDAQ 100 [7][8] - Higher beta names that have performed well can also detract from portfolio performance during pullbacks, emphasizing the need for diversification [9] Gold and Dollar Outlook - The outlook for gold remains bullish, with positive momentum across various time frames, despite some signs of exhaustion [10][11] - The dollar may be experiencing a short-term breakout, potentially rallying to around 100, although it remains within a cyclical downtrend [12][13] International Markets - Japanese stocks are showing strong momentum, with recent gaps indicating significant interest, though caution is advised against chasing the uptrend [15] - European equities are also exhibiting bullish intermediate-term implications, suggesting a potential rotation favoring international markets over the US in the coming months [16][17]