Stock Market Outlook entering the Week of November 7th = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Action: Uptrend
- Elliott Wave Analysis: Uptrend
The stock market outlook remains in an uptrend, as the S&P500 ($SPX) accelerated higher the first week in November. The past 5 trading days added another 2% to the S&P’s already impressive October performance. The index sits ~11% above the 200-day, and 5% above the 50-day. Year to date, the S&P500 is up an impressive 25%.
The ADX shows bullish price action and trend, as does price/volume.
Elliott Wave still shows an uptrend; the 3rd wave of Minor wave 1 rolls on.
As signaled for several months, the U.S. Federal Reserve will start to taper monthly bond purchases, reducing them by $15 billion per month. They’re starting from $120 billion per month, so the program won’t be completely stopped until next June.
But the Fed still sees inflation as transitory, so there’s no rush to raise interest rates. Basically, this means that the Fed will continue to provide stimulus to the economy, just not as much as they have been.
Historically, November and December are positive months for the S&P. Add the better than expected October jobs report, and you’ve got good reason to be bullish heading into 2022.
But don’t blindly chase! The VIX hit 15 mid-week, which has been the low end of it’s price range for some time now. The S&P’s price level, relative to the 200 day, is also extended. So use consolidations and corrections to your advantage, knowing that they have a high probability of being a buy the dip opportunities.
Best to Your Week!