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.
2023-11-12-SPX Trendline Analysis - Daily
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).
2023-11-12- SPX Elliott Wave Analysis - Daily - Primary C (Bearish)
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.
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:
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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Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics
Charts provided courtesy of stockcharts.com.
Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.
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