Historic November, so far...
SPY is having it's 4th consecutive weekly gain making November one of the best in the past century - with one week more to go.JPM also notes the bullish buying by retail - often referred to as LIFO (last-in-first-out):
"Retail investors net bought +$4.8B of cash equities this past week, +2.3 standard deviations above the last 12M average and the highest weekly inflow recorded since April 2022."
Also noteworthy: VIX has fallen to its lowest level in nearly 4 years!
Implied volatility is due for an expansion, but I still contend: NOT BEFORE SPX TAGS 4575!
The Week Ahead
Macro event risk in next week's data may trigger some "IV expansion" should the US 2Y + 5Y Treasury auctions disappoint Monday afternoon, or Retail Sales Tuesday.
There is also PCE Prices (Preliminary) for Q3 with a bunch of Q3 estimates for GDP and Consumer Spending coming in Wednesday. but the Fed-important PCE Price Index and CORE PCE for October is released Thursday.And Thursday also sees the latest jobless claims number and THIS one I expect to be higher.
Here's a great thread to explain why.
Next week is set up to be a big upside surprise, with initial claims likely closer to 250k
Of note: Thursday is the OPEC+ meeting which was pushed out from this Sunday.
Here's what Craig is focused on:Craig of #macro-advisor-craig weighs in:
Fed speak is back next week. Waller Tuesday will be important because he's been seen as someone with sway on committee so we will see how comfortable he is with current market pricing of Fed cuts. He has in the past yeah smacked the market when it gets too far ahead. Mester goes. Wednesday. Then and then Powell speaks twice on Friday which comes after the PCE print on Thursday.The Fed/Powell is likely to use the speak next week to help set up the December Fed meeting which currently are pricing 0% chance of a hike. If we got a hot core services ex housing inflation print on PCE, it would make sense for the Fed to remind the market that hikes could still be on the table and that the current expectations of 4 cuts next year are wat too aggressive.As discussed earlier, we also have significant UST note supply next Monday and Tuesday. We are post expiry and low volume Thanksgiving week so there is a window of weakness open here where macro can trump flows for 1-2 weeks, especially after the monster rally and easing of financial conditions this month with very compressed VIX setup isn't great
Swing Updates From Wed Nov 22nd & Fri Nov 24th:
Market Direction:
SPX not quite at 4575 hrly gap fill.
Market isn’t a LRE (low-risk-entry) short until we fill that SPX gap AND Vix-Tell SVXY turns red.
Macro/Sector themes:
My bet that past 2 weeks that Commodities and China are oversold while Tech is overbought, so there will likely be a rotation, is still shaping up.
XME and XLB continue to do well. BIDU exploded higher today and nothing was closed/added.
Today, Value is really beating Growth, but it is a theme we should see pick up into year-end.
Maybe Oil and 10Y gets a bounce into/post OPEC+ meeting Nov 30th.
Maybe USD gets a bounce, but overall, this weakness is really helping stocks and commodities until a bounce of size appears in dollar and yields.
Chases Today:
Swings turned Chases today: COIN tagged 116.30 PT as discussed past few weeks, and BIDU hit 125 PT as positioned for last week.
They should digest here, but BIDU in particular looks bullish still coming off the bottom and forming a 'cradle formation' on the wkly.
A few very short scalp chases from MAG7 weakness: AAPL needing to stay below 191 with NVDA short below 481.
The one long chase was TSLA holding above 235 with run into 240 potential. Tesla has it’s Cybertruck reveal event next week where bulls have waiting nearly 5 years to see!
Swing Play Update Today:
COIN tagged 116.30 and BIDU hit 125 PT. They should digest here, but BIDU in particular looks bullish still coming off the bottom and forming a ‘cradle formation’ on the wkly.
BABA looks good but needs time.
ZM is a bottom fishing play after earnings. Not really part of the sector theme though so needs time.
ENPH be careful as it is near the 100 resistance level, but I still like this higher in time.
ISRG, KHC, WPM, TRV, GD, CME, and JETS look fine. FXY still a “hold your nose” play while it bases next few weeks.
COST, UBER, DIS are strong continuation plays with SLV in breakout mode above $22.
ZS + CRWD are strong swing longs for some but remember they have earnings Mon/Tues
Make Hay While The Sun Shines
Here's a recent interview with my Inflation Insights and Bold Projections for your weekend 'enjoyment'.
BLACK FRIDAY ALL WEEK!
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