EB Daily Market Report - Quick Update - Wednesday, November 1, 2023

Tom Bowley - November 01, 2023

I'm going to make this DMR very quick since I've already done TP Live and our Live Trading Room earlier. I'll also be hosting our Q3 Earnings event later today at 5:00pm ET. Room instructions will be mailed out separately this afternoon. If you cannot make the event live, you'll be able to view the recording later this evening or tomorrow, at your earliest convenience.

The Fed is on deck as we'll hear the latest policy statement in just a couple minutes at 2:00pm ET. Our major indices are mostly higher, though small and mid caps are trading down and underperforming on the session. Specifically, on the S&P 500, I'll be watching short-term support and resistance at 4100 and 4250, respectively. Currently, the S&P 500 is trading at 4207, but I expect that volatility will increase after the 2:oopm ET announcement. But do we clear either of those key support/resistance levels at today's close? If we close above 4250, I'll grow much more bullish, believing that the recent low is THE low for this correction period. If, however, we sell off big into today's close, we'll have no choice but to remain cautious until price action resumes to the upside.

Patience remains critical. Personally, I'm invested heading into the announcement, but I wouldn't consider myself overly aggressive right now.

I spoke of volatility ($VIX) earlier. The VIX is currently at 17.56, down another 3.20%. A close on the VIX beneath 17 really begins to favor the bulls, in my opinion. If we move back up through 20, the edge remains with the bears short-term.

Finally, let's talk 10-year treasury yield ($TNX). The TNX is down 7 basis points today, residing currently at 4.81%. I believe we're heading to 4.50-4.60% short-term. There's a negative divergence in play on the daily chart and the 50-day SMA is at 4.54%. I won't be at all surprised if it's tested over the next couple weeks. Clearly, today's FedSpeak will play a big role in the direction of the TNX, so let's tune in and listen.

Happy trading!

Tom