EB Daily Market Report - Tuesday, November 14, 2023
ChartLists
Most ChartLists have been updated as of the last few days. Today, I completed the latest Strong AD ChartList, which should be updated later today on our website. If not today, then certainly by early tomorrow morning.
Executive Market Summary
- Futures were uninspiring until 8:30am ET, when the October CPI report was released
- Futures skyrocketed after the Core CPI came in below expectations and our major indices have been strong throughout the day
- The 10-year treasury yield ($TNX) has tumbled 18 basis points to 4.45%, more than 10% off its high at 5.00%, resulting in a topping head & shoulders breakdown
- Small caps (IWM, +4.84%) and mid caps (MDY, +3.81%) have benefited the most, with both clearing their 50-day SMA
- All 11 sectors are higher, but the collapsing TNX has sent buyers to real estate (XLRE, +5.37%) in droves
- Consumer discretionary (XLY, +3.34%) is also having a very strong session, led by furnishings ($DJUSFH, +7.75%)
- Health care (XLV, +0.75%) lags rather badly on the day
- Among commodities, silver ($SILVER, +3.52%) is surging, but still remains in a downtrend that began in May
- Renewable energy ($DWCREE, +11.01%) is finally recovering from its massive selloff as Enphase Energy (ENPH, +14.30%) and First Solar (FSLR, +11.10%) are the S&P 500's top 2 performers
Market Outlook
I don't believe there's much doubt that the correction is over now. Today's strong gap higher and further intraday buying is further proof of that as the downtrend line from July is definitely broken now:
At this point, what could bears be clinging to?
Sector/Industry Focus
Real estate (XLRE) has been a very weak industry group, but its action over the past two weeks reeks of a renewed uptrend:
You can see the 34.50-35.50 range was critical as support on the way down and that same range has been critical resistance on the way up. But today, we're clearing that range and doing so with excellent volume. A close today over 35.50, I believe, confirms that this uptrend is likely to carry XLRE prices higher through year end. Note also that the pullback last week successfully held the rising 20-day EMA. This current breakout is always a good sign after key support holds.
ChartLists/Strategies
Meta Platforms (META) is the latest key NASDAQ name to push to new highs. If these large caps continue to break to new highs, it'll be VERY difficult for the bears to regain control. Check out META's breakout today:
I'd like to see more volume as today's volume is nothing more than average. Otherwise, I see nothing but bullish signals, including the increasing bullish momentum (PPO) and the return of the RSI above 60. RSI mostly held 40 support throughout the July to October correction.
Earnings Reports
Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.
Tuesday, November 14:
HD, MUFG, SMFG, SE, ONON, TME, VIPS, ARMK, CAE, ENR, CSIQ
Wednesday, November 15:
CSCO, TJX, PANW, TGT, JD, SQM, XPEV, TTEK, CTLT, AAP, HI, KLIC, SONO
Economic Reports
October CPI: +0.0% (actual) vs. +0.1% (estimate)
October Core CPI: +0.2% (actual) vs. +0.3% (estimate)
Happy trading!
Tom