ANALYSIS
The stock market outlook continues to show an uptrend for U.S. equities.
The S&P500 ( $SPX ) rose 0.7% last week. The index sits ~3% above the 50-day moving average and ~12% above the 200-day moving average.
All three indicators show bullish price action. The index saw elevated selling on Thursday and Friday, but neither session met the criteria for a distribution day.
SPX Technical Analysis - November 02 2025
PERFORMANCE COMPARISONS
The Tech sector ( $XLK ) led stocks higher again, while Real Estate ( $XLRE ) underperformed, along with Materials and Consumer Staples ( $XLB & $XLP ).
Financials and Real Estate ( $XLF, $XLRE ) fell to bearish bias; Communications ( $XLC ) eased to neutral after rising almost 18% since it shifted to bullish back in May.
S&P500 Sector Performance - November 02 2025
Large and Mega Cap Growth ( $IWF & $OEF ) outperformed, while High Dividend, Low Beta, Small and Midcap Value ( $SPHD, $SPLV, $IWN, $IJJ ) underperformed significantly.
Mid Cap Growth and Value ( $IJH, $IJJ ) were on the move again this week; Mid Cap Growth slowed back to Neutral and Mid Cap Value fell to Bearish bias.
S&P500 Sector Style Performance - November 02 2025
The U.S. Dollar ( $DXY ) was the best asset last week, so that was headwind for the other classes ( Gold struggled the most ). Bonds went back to Neutral bias.
Asset Class Performance - November 02 2025
COMMENTARY
The FOMC decided to lower interest rates 0.25% last week. Given the lack of government data, there was a very small chance of no change, but the number of recent layoff announcements probably spooked them enough to do something.
5 of the Magnificent 7 have reported earnings last week, and Amazon ( $AMZN ) stole the show, in terms of price performance, gaping up ~12%. Alphabet ( $GOOGL ) also performed well, while Apple's stock price didn't respond much. Microsoft ( $MSFT ) didn't far as well, reversing the positive, post-earnings move by the end of the week, and Meta ( $META ) was punished after the company announced plans for $100 billion in AI investments for 2026.
The U.S. and China reached a trade deal over the weekend, which removes many of the recent trade barriers the two countries enacted. The deal should reduce supply chain issues for a number of industries, including semiconductors, rare earth materials, agriculture. Expect to see some volatility in Sunday futures...much like prior trade-deal headlines that occurred while markets were closed.
Looking ahead, ISM Manufacturing and Services PMI data is released Monday and Wednesday, respectively. Since it's unlikely we'll see any government data releases, attention shifts to private sector reporting, namely ADP Employment Change on Wednesday, and Challenger Job cuts on Thursday.
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, TradingEconomics.com
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Charts provided courtesy of stockcharts.com.
For historical Elliott Wave commentary and analysis, go to ELLIOTT WAVE lives on by Tony Caldaro. Current counts can be found at: Pretzel Logic, and 12345ABCDEWXYZ
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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