Our December 2021 stock and ETF watchlist with entry points, sector analysis, and market outlook.
Market Overview
November came with all time highs across all the indexes and ended with some unforeseen volatility. The market was continuing its run which was expected due to past performances of the holiday seasons but a new threat entered the market. A new Covid variant now named Omicron became present in South Africa. The market reacted violently to this news on Black Friday with a sell off across the majority of the market and other riskier assets such as crypto. At the time much information isn't known about the variant which has bought a lot of uncertainty into the market. We saw plenty of travel stocks and energy stocks get hit due to anticipation of a lockdown or potential restrictions coming into place. President Joe Biden has said "The variant is a cause of concern, not a cause for panic.". He also believes that a lockdown will not be necessary. These statements seemed to calm the market until Federal Chair Jerome Powell spoke. "At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner," he said. "I expect that we will discuss that at our upcoming meeting." Powell also mentioned retiring the word 'transitory' when referring to inflation. These statements did not bode well for the market. Across the indexes we saw drops from 1.6%-1.9%. Due to these quick sell offs it's safe to say that the market is volatile at the moment and more sensitive to any news regarding the variant and talks of the taper.
Macro Concerns
At the close of the month all the indexes are down. The Dow Jones (-1.86%), S&P 500 (-1.01%), NASDAQ (-O.37%), Russell 2000 (-6.75%). At the close of the month the VIX was at 27.19. The "Fear and Greed" index was at 26 at the end of the month indicating fear. Remember, the higher the VIX the more volatility there is in the market due to uncertainty and the "Fear and Greed" index gives you insight on market sentiment. Combine these two and you can see the pulse of the market. Also don't forget that the supply chain is still an issue underneath all these new events that have transpired.
Index Performance
| Index | Performance |
|---|---|
| Dow Jones (Nov 2021) | -1.86% |
| S&P 500 (Nov 2021) | -1.01% |
| NASDAQ (Nov 2021) | -0.37% |
| Russell 2000 (Nov 2021) | -6.75% |
Top Sectors
Bottom Sectors
Stock Entry Points
| Ticker | Daily Entry | Weekly Entry |
|---|---|---|
| NKE | $148–$163 | $140–$149 |
| ABNB | $164–$172 | $150–$168 |
| MSFT | $303–$315 | $270 |
| AAPL | $138–$148 | $138–$149 |
| Z | $62 | $55 |
| SQ | $202–$238 | $179–$218 |
| PYPL | $174–$205 | $209 |
| MCD | $235–$244 | $226–$231 |
| WMT | $140–$145 | $135–$141 |
| TSLA | $891–$990 | $859 |
| SBUX | $109–$115 | $96–$111 |
| V | $191–$226 | $193–$207 |
| PG | $138–$143 | $132–$137 |
| WM | $154–$156 | $131–$139 |
| CHPT | $22–$27 | $20–$27 |
| IIPR | $250–$255 | $245 |
| SHOP | $1,365–$1,495 | $1,333 |
| ADBE | $634 | $584–$641 |
| AMZN | $3,324–$3,429 | $3,179–$3,285 |
| CRWD | $230–$262 | $204–$234 |
| NVDA | $244–$254 | $240 |
| AFRM | $107–$125 | $113 |
ETF Entry Points
| Ticker | Daily Entry | Weekly Entry |
|---|---|---|
| ARKK | $102–$122 | $98–$122 |
| VUG | $303–$308 | $306 |
| VGT | $422–$429 | $426 |
| VOO | $411–$416 | $413 |
| SMH | $257–$278 | $274 |
Key Takeaways
- →November 2021: Omicron variant discovered on Black Friday — triggered broad selloff.
- →IT +6.68% held up; Energy and Financials hit hardest by variant fears.
- →AFRM added as BNPL (Buy Now Pay Later) sector gained mainstream traction.
- →Fed accelerated taper timeline; Russell 2000 -6.75% underperformed significantly.
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