Stock Market Update Friday November 3, 2023 Stock Market Shows Robust Breadth Indicating a Bullish Outlook
The stock market this week displayed a significant level of breadth, a bullish signal for the stock market's overall health. As we closed on Friday, the market reached what can be considered an 'extreme overbought' state, which typically suggests a forthcoming period of consolidation or a correction. Our analysis indicates that this moderation is likely to occur early in the upcoming week.
A notable development is the VIX index, commonly referred to as the 'fear gauge', which has settled below the critical level of 15. This development is particularly encouraging for bullish investors, signaling a stable market environment ahead.
As we draw closer to the end of the week, we anticipate a reduction in trading volume, a seasonal occurrence aligned with the upcoming holiday season in the United States. In this transitional phase, it is common for junior traders to assume more prominent roles as their senior counterparts commence their vacations in the weeks leading up to the holiday.
Encouragingly, the market has had a week to remember as we move through November. The catalyst for the latest rally appears to be the October payroll figures, which fell short of expectations. While such a miss may traditionally be perceived as negative news for the economy, it conversely suggests positive tidings for the stock market. The underwhelming payroll data fuels speculation that the Federal Reserve might pause its interest rate hikes, a relief for investors concerned about tightening financial conditions.
Reflecting on the week's performance, the S&P 500 index saw an increase of nearly 1%, ending the week with an impressive gain of nearly 6% from the prior Friday. In the bond market, two-year Treasury yields experienced a significant decline of 15 basis points to 4.83%, and long-term bonds dipped to a yield of 4.78%, marking the lowest rate since October 11. Commodities also saw movement, with gold prices inching up to $1,993 per ounce, while WTI crude oil retreated below the $81 mark per barrel.
Today we are showing a premium chart Berkshire Hathaway $BRK.B that we sent to some of our private clients.
Our live day trading sessions on Discord have proven to be quite successful this week. We received numerous emails from our premium clients expressing their delight at the substantial profits they garnered. Their adherence to our trading models and unwavering discipline were cited as the primary contributors to their success.