• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Stock Market Still Has Legs, Bitcoin Sees a Breakthrough Rally: Is the Market On the Mend?
Stock

Stock Market Still Has Legs, Bitcoin Sees a Breakthrough Rally: Is the Market On the Mend?

by November 10, 2023
by November 10, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

It was quite the week in the stock market.

Things started out well, with the broader market indexes rallying higher. By Thursday, investors were gearing up for the S&P 500 index ($SPX) to notch a nine-day winning streak. Alas, that didn’t happen, and instead the index gave up all its weekly gains. 

The Nasdaq Composite ($COMPQ) also snapped its winning streak. But Friday saw the stock market regain strength, with the S&P 500 and Nasdaq Composite closing above their previous highs. The Nasdaq saw its best trading day since May.

If you look beneath the surface of this week’s action, you can see that market breadth was weak earlier on, but, by Friday, showed slight improvement (see chart below). However, it was still not at a level that would confirm the bullish move in the broader indexes.

CHART 1: S&P 500 RALLIES, BUT BREADTH NEEDS TO CATCH UP. Although the S&P 500 closed above its previous high, breadth is still weak. Watch the advances-declines, percentage of stocks trading above the 200-day moving average, and bullish percent index. Chart source: StockCharts.com. For educational purposes.

The NYSE Common Stock Advance-Decline Issues ($NYAD) is still trending lower, the percentage of stocks above their 200-day moving average shows slight improvement, and the S&P 500 Bullish Percent Index is getting close to the 50-level threshold. 

Small- and mid-cap stocks, which couldn’t hold on to their short-lived up moves, gained a little strength, but not enough to confirm a broad market rally. Materials, Consumer Staples, Health Care, and Energy are still weak. If those areas start showing strength, it would be much more optimistic.

What About Bonds?

Fed Chairman Powell’s comments this week suggested that more work needs to be done to lower inflation. His more hawkish tone could have been the main reason the market fell on Thursday. Another reason was the weak Treasury auction, indicating that demand for US Treasuries has weakened in the US and abroad.

Treasury yields are a major focus among investors, so it’s natural to focus on the 10-year Treasury yield chart. After rallying close to 5%, the 10-Year US Treasury Yield Index ($TNX) pulled back, tested the 4.5% level, and reversed (see chart below). It’s now trading at its 50-day moving average.

CHART 2: THE 10-YEAR TREASURY YIELDS AT 50-DAY MOVING AVERAGE. The 10-year yields tested 4.5% and reversed. Chart source: StockCharts.com. For educational purposes.

Rising yields tend to instill fear among investors, especially in the Tech sector. So, when yields pulled back, investors gravitated towards the larger, safer big tech stocks. But remember, fear can flip the stock market on a dime, and we’re seeing a lot of flip-flopping going on in the stock market right now.

And Let’s Not Forget Bitcoin

No discussion of this week’s stock market would be complete without touching on Bitcoin. The daily chart of $BTCUSD below shows a dramatic rise in the cryptocurrency. 37,000 is considered a significant threshold, so a close above this level could mean more bullish movement. As of now, Bitcoin is not correlated to any other asset, which makes it a potential asset for diversification.

CHART 3: DAILY CHART OF BITCOIN TO US DOLLAR. Bitcoin rallied and ended the week higher than the 37,000 threshold level. Where to next? Chart source: StockCharts.com. for educational purposes.

So, what was behind the massive move in Bitcoin? The catalyst could be the hope that regulators would approve a spot Bitcoin exchange-traded fund. But with any fast move up, you want to identify how far it could keep moving higher. Looking at a weekly chart, the next possible resistance level would be at the 47,000 level, which is quite a bit higher than where Bitcoin is trading.

CHART 4: WEEKLY CHART OF BITCOIN TO US DOLLAR. Looking at the weekly chart, the next possible resistance level for the cryptocurrency could be around the 47,000 level. Chart source: StockCharts.com. For educational purposes.

What’s On Deck?

Next week, investors will find out October’s inflation CPI and PPI numbers. These data points have had an impact on the stock market’s direction. Hotter-than-expected inflation numbers usually cause a selloff in equities. In an environment where investors are unsettled, not knowing whether the Fed will raise rates at least one more time, it’s not unusual to see wild swings in either direction. But generally, investors aren’t fearful, as can be seen in the chart of the CBOE Volatility Index ($VIX). 

CHART 5: VIX KEEPS GOING LOWER. Investors aren’t showing any signs of fear in spite of the indecisiveness. Chart source: StockCharts.com. For educational purposes.

Anything can bring back investor nervousness, but until that happens, it may be safe to reenter the market with small positions and be prepared to offload them if signs of fear resurface.

End-of-Week Wrap-Up

US equity indexes up; volatility down

$SPX up 1.56% at 4415.24, $INDU up 1.15% at 34283.10; $COMPQ up 2.05% at 13798.11$VIX down 7.33% at 14.17Best performing sector for the week: TechnologyWorst performing sector for the week: EnergyTop 5 Large Cap SCTR stocks: Vertiv Holdings, LLC (VRT); Palantir Technologies, Inc. (PLTR); Applovin Corp. (APP); New Oriental Education & Technology Group, Inc. (EDU); Super Micro Computer, Inc. (SMCI)

On the Radar Next Week

October CPIFed speechesOctober PPIOctober Retail SalesOctober Housing Starts

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

You Might Also Like
  • BUY Signals Continue to Diminish
  • High Risk of Market Downside in December?
  • Looking for Strong Stocks to Buy? Start with These Three Tools
  • Bitcoin Futures Open Interest Spike
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Find Great Trading Ideas By Combining SCTR Rankings and RRG
next post
Decoding Bear Markets, Divergences, & More! A Q&A with David Keller, CMT

You may also like

Top Ten Charts for August: Best Healthcare Stocks for August...

August 22, 2024

Three Ways to Stay on the Right Side of the...

November 16, 2023

Small Caps Poised to Soar: Is Now The Time To...

August 1, 2024

Top Ten Hidden Features of StockCharts, Features 1-5

November 9, 2023

Sector Spotlight: Risk to S&P as Technology Under Pressure

August 8, 2023

The Halftime Show: It’s NOT What the Fed Does That...

April 17, 2023

Chesapeake Energy: A Stock That Could Pump Much More

September 12, 2023

Today’s Price Action Could Be the Start of a Rally...

August 19, 2023

Bonds, Secular Bear Market, and the Impact on Small Caps

August 29, 2023

Patience Required As A Handle Forms

April 9, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Week Ahead: Important For Nifty To...

    September 3, 2023

    Bearish Triad: Stock Market Indexes and...

    October 22, 2023

    Bullish Breadth Improvement Suggests Further Upside...

    May 13, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here