(A MUCH-HYPED PRESIDENTIAL ELECTION & CENTRAL BANK MEETINGS MAY INFLUENCE MARKET PRICE ACTION THIS WEEK)
November 4, 2024
Hello everyone
WEEK AHEAD CALENDAR
Monday, Nov. 4
10 a.m. Durable Orders final (September)
10 a.m. Factory Orders (September)
10:30 p.m. Australia Rate Decision
Previous: 4.35%
Forecast: 4.35%
Earnings: Marriott International, Diamondback Energy, Wynn Resorts, Palantir Technologies, NXP Semiconductors NV
Tuesday, Nov. 5
8:30 a.m. Trade Balance (September)
9:45 a.m. PMI Composite final (October)
9:45 a.m. S&P PMI Services final (October)
10:00 a.m. ISM Services PMI (October)
Events: U.S. Presidential election
Earnings: Marathon Petroleum, Yum! Brands, Microchip Technology, Super Micro Computer.
Wednesday, Nov. 6
10:00 p.m. China Trade Balance
Previous: $81.7B
Forecast: $73.5B
Earnings: CVS Health, Howmet Aerospace, Albemarle, Qualcomm, Gilead Sciences, Take-Two Interactive Software, Marathon Oil, Match Group.
Thursday, Nov. 7
8:30 a.m. Continuing Jobless Claims (10/26)
8:30 a.m. Initial Claims (11/02)
8:30 a.m. Unit Labor Costs preliminary (Q3)
8:30 a.m. Productivity preliminary (Q3)
10:00 a.m. Wholesale Inventories final (September)
2:00 p.m. FOMC Meeting
Previous: 5.00%
Forecast: 4.75%
3:00 p.m. Consumer Credit (September)
Earnings: PG&E, Moderna, Molson Coors Beverage, Halliburton, Tapestry, The Hershey Co., Ralph Lauren, Warner Bros. Discovery, Airbnb, Axon Enterprise, Expedia Group, Akamai Technologies, Fortinet.
Friday, Nov. 8
8:30 a.m. Canada Unemployment Rate
Previous: 6.5%
Forecast: 6.5%
10:00 a.m. Michigan Sentiment preliminary (November)
Earnings: Paramount Global
I’m sure I don’t need to inform you that this week is packed with high-impact market events.
The U.S. election all day Tuesday is sure to garner attention, but I think the subject has been talked to death, and people just need some space and quiet to think now. I mean, what more can be said? Either Trump will win, or Harris will win. The question is, what happens in the Senate/House? I have heard all different people saying that if one or the other wins, the market will crash. Well, let’s wait and see. After all, the market usually rallies in the final months of the year during a presidential election year.
Last week, the US$ pushed higher, shrugging off a weak October jobs report that was likely impacted by hurricanes and ongoing labour strikes. Markets seemed to ignore these temporary disruptions. Inflation numbers came in right on target, and now traders are all but certain we’ll see a 25-point rate cut from the Fed on Thursday.
A similar outcome is expected from the Bank of England, which is also to be announced on Thursday.
MARKET UPDATE
S&P500
Markets are looking interesting.
It is possible to interpret that we are close to a top in the markets and could soon be entering a Wave 4 pullback. We have had a two-year bull market, and risk is rising for a broad corrective pullback. Further price evidence is required to add confidence to this scenario. Last month, the market reached 5,878.
Of course, with the uncertainty of the election out of the way, we could get a sharp upside rally to around 6,200 before we see this Wave 4 pullback take place.
Either way, if you are holding stocks and want to take some profits off the table, now is the time to do it. (You could take half off and let the other half run). (Don’t be worried about catching the last moves in this rally). Likewise, if you are holding any January 2025 LEAPS, take profits now. That way, you can be cashed up to re-enter the market near the base of the Wave 4 decline. (Note that Buffett has been selling big parcels of stock for the last couple of months, as have many other large companies & funds).
And if we do get that sharp rally to the upside, you could also think about buying a few puts at that time on the SPX or buy SDS.
Possible downside target for a Wave 4 decline is around 5,120.
GOLD
Gold reached a high of $2,790 last week. We are now seeing a short-term correction. (If you have a good profit on your gold LEAPS, and they expire in the first half of 2025, you could take half off here and let the other half run). My advice is if you own LEAPS that are a spread – have two legs – then don’t run them to near expiration. Take profits sooner.
Gold can still extend toward the $3000 area over the coming weeks.
Support = ~ $2,700/$2,680
BITCOIN
Bitcoin has just fallen short of making a new high for the year. It now lies at an interesting juncture.
To hold its uptrend from the $49,577 low of early August, support at $66,700/$65,000 should now hold. If this doesn’t hold, we could see a greater decline towards the $50k area. If you look at the Daily Bitcoin chart, you can now see a rectangle pattern set up, where the recent top ($73,600) caps the upside and the $49,577 low caps the downside. Time will show us how the price action will unfold.
QI CORNER
SOMETHING TO THINK ABOUT
Cheers
Jacquie
