The monthly market has been strong, but volatility and uncertainty have been very high.
No notable money movement was detected today and the weekly market bullish momentum looks similar to last week.
As a result, the weekly market potential is bullish amid heightened uncertainty.
Looking at today's market action, the SPX opened slightly higher at 5875 and continued to move higher throughout the week to close at 5970.
This has reduced the weekly market uncertainty somewhat and we could see some signs of market direction early tomorrow.
Investors seem to be in glide mode, passively riding the rally. Meanwhile, skepticism about the rally is slowly growing.
We think the rally can continue because we don't see a trend turning point on our radar just yet.
Our sector outlook suggests that bonds and the SPX could go higher. Also, it's too early to tell, but here's a heads up: Maybe Chinese stocks will turn higher in the coming weeks.
Our indicators for the markets next week are mostly showing bullish signals.
For next week, which starts on November 25, it looks like the SPX will likely move between 5950 and 6050 and then open higher and close bullish.
Then on Thursday, if the PCE or other developments help the market, the rally will continue, but there may be a struggle at the next resistance level, SPX 6035.
Let's explore some additional insights.
- We have a positive outlook on the market. This is because the Senate might return to its traditional role of advising and checking decisions which could help the market rally or grow after the elections. This growth could also be influenced by the usual increase in market activity during year-end and the fact that businesses are generally making good profits.
- The Federal Reserve may decide to keep interest rates steady in December. This is a result of a strong domestic economy and isn't due to a sudden increase in the rate of inflation (the overall increase in the cost of goods and services). Also, the US's approach to controlling the supply of money looks to remain flexible and aimed towards economic growth.
- But, looking further down the line, things are less clear. There are still significant risks associated with Trump's policies that investors aren't paying enough attention to.
- Also, there could be a conflict between Trump and Powell (the Federal Reserve chairman) if a decision by the Federal Reserve to halt any changes in the interest rate is seen as the cause of any weakness in the S&P500 index (a measure of the market's performance). This conflict could generate new problems in the coming months if Trump uses this to push Powell and his colleagues into taking actions they might not agree with.