EB Daily Market Report - Wednesday, November 22, 2023

Tom Bowley - November 22, 2023

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Executive Market Summary

Futures were higher overnight and our major indices shot up at the opening bell
We've seen a battle between the bulls and bears since that early morning surge high, but all of our major indices are higher as we move into the final 30 minutes
Communication services (XLC, +0.76%) and consumer staples (XLP, +0.66%) lead today as 10 of 11 sectors are in positive territory
Energy (XLE, -0.15%) lags slightly as crude oil prices ($WTIC, -1.08%) drops beneath $77 per barrel
Nearly all commodity prices are lower with copper ($COPPER, -1.22%) leading the move down
The 10-year treasury yield ($TNX, -0.05%) is down fractionally, remaining near 4.42%
The Volatility Index ($VIX, -2.62%) dipped below 13 today, nearly testing major support at 12.70
Some retailers are having a relatively nice day as broadline retailers ($DJUSRB, +1.39%) and apparel retailers ($DJUSRA, +1.20%) are leading consumer discretionary

Market Outlook

Well, the S&P 500 has absorbed the 3-month correction and the bulls have battled all the way back, with the benchmark now within 1% of its summer high near 4600:

Isn't it interesting how seasonality called this advance PERFECTLY? I pointed out that the S&P 500 has a very bearish period that ends on October 27th and suddenly the most bullish period of the year kicks in. That vertical blue-dotted line points out that 2023 followed this seasonal pattern as about as well as possible. Selling before the vertical blue-dotted line and buying after.

Do you believe history repeats itself?

Sector/Industry Focus

Volatility ($VIX) is moving lower and lower and lower and we're on the verge of yet another big breakdown in the VIX:

A low VIX generally means that bullish, boring action lies directly ahead of us. That's my favorite time to trade, because rarely do we wake up to bright red futures. Low expected volatility normally means that longer-term swing trading becomes much more profitable.

ChartLists/Strategies

As we look forward to another strong seasonal month in December, it'll be very exciting if we see any meaningful short-term pullback as our odds of successful trades would accelerate, in my opinion. Keep an eye on stocks on our primary ChartLists - Strong Earnings (SECL), Strong Future Earnings (SFECL), and Strong AD (SADCL). As soon as I update the Raised Guidance (RGCL) and Bullish Trifecta (BTCL), that'll provide you with 5 solid ChartLists or "Watch Lists" to find solid reward to risk trades.

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.

Wednesday, November 22:

Friday, November 24:

None

Economic Reports

Initial jobless claims: 209,000 (actual) vs. 225,000 (estimate)

October durable goods: -5.4% (actual) vs. -3.2% (estimate)

October durable goods ex-transports: +0.0% (actual) vs. +0.1% (estimate)

November consumer sentiment: 61.3 (actual) vs. 60.5% (estimate)

Happy trading!

Tom