Stock Market Outlook entering the Week of November 12th = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Signals: Uptrend
- Elliott Wave Analysis: Downtrend
ANALYSIS
The stock market outlook heads into the second week of the current uptrend, and there’s STILL a lot of volatility beneath the market’s surface. Another week to tread carefully when deploying your capital.
The S&P500 ($SPX) gained 1.3% last week. The index starts this week ~1.5% above the 50-day moving average, and ~3.5% above the 200-day moving average, after breaking above the recent trendline of lower highs.
SPX Price & Volume Chart for the Week of Nov 12 2023
The ADX directional indicators remain bullish. Price/volume also shows an uptrend in place, but trading volume remains an issue for the new rally. It remained below average for the entire week, and the highest volume day came via institutional selling (i.e. a distribution day).
SPX Elliott Wave Analysis for the Week of Nov 12 2023
Elliott Wave analysis continues to show a counter-trend rally in progress, with no change the overall wave count versus last week. The current wave (Minor 2 or A) managed to put in a higher high on Friday, but the RSI(5) shows a potential negative divergence, suggesting the end is near.
COMMENTARY
The 30-year bond auction was the main event last week, and it didn’t go well. Demand was less than expected, indicating that investors see more risk in the future, and want a higher interest rate to compensate. The result was higher bond yields on Thursday, which caused equities to sell off.
Speaking of Thursday fireworks, investors seem to have a more favorable view of Powell’s hot-mic swearing than of his handling of interest rates.
And on Friday, after the market’s closed, the credit rating agency Moody’s changed their outlook for U.S. sovereign debt from “stable” to “negative”, based on the dysfunction in the U.S. legislative branch. It’s not an outright downgrade, like the one from Fitch in August, but not a sign of strength either.
Moving on to this week, the last, large chunk of Q3 earnings reports hit the wires, along with a handful of economic datasets:
- Tuesday = October CPI Inflation data
- Wednesday = October PPI Inflation data & Retail Sales data
- Thursday = Philly Fed Manufacturing data
And last and least, there are a total of 14 U.S. Federal Reserve speaker events to enjoy!
Best to Your Week!
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