Here's the Deal with Markets - November 18, 2024

Economy: In Slowdown

Market Cycle: Bullish

_{Week 46 of 52 for 2024: 88.5% of the way through 2024}

Weekly Note:

Programming Update: Based on some fantastic feedback, I’ll be changing the format of this weekly newsletter. Going forward, it will be divided and emailed in two separate segments. The first will cover the economic news from the past week, and the second will focus on key market trends and what to watch for in the week ahead. This change is aimed at making the newsletter easier to digest in smaller pieces.

Thank you to everyone who has shared feedback. This project will continue to evolve to bring economic and market clarity to those without the time or insights to do so themselves.

This Week in Markets

Finally! A chance to reload.

After SPY, DIA, and QQQ reached new all-time highs and IWM reached its 52-week high on Monday, markets finally cooled off the rest of the week.

Here’s the thing, anyone freaking out and calling a top after a 2.5% correction on the heels of a 17% climb since the beginning of August hasn’t been following markets or playing the action for long.

Instead, you should be looking for the opportunity we’ve been talking about the last few weeks to get involved or add to positions.

Sure, there’s a possible island reversal top in SPY, DIA, and QQQ as the election euphoria has worn off. However, chart patterns are but a single metric and as with everything in markets, they need to confirm. Plus, SPY also has an island bottom from two weeks ago.

It is common to find a number of bearish chart patterns in bull markets. It’s the reversal of those that help lead markets higher.

When you have tailwinds like market seasonality, election seasonality, one of the best performing bull markets of all time, elevated profits and margins in corporate America, continued elevated spending from consumers, you add risk when markets offer deals.

If, on the other hand, this move ends up failing, then you now have knowledge of the most significant piece of information for the markets direction in the next few months.

There’s nothing wrong with being wrong. It helps narrow down the options for the real truth. So if you’re wrong early, you’ll know early. There’s answers and improvement in taking calculated risks. The more you do so, the more you know when to take bigger risks and when to dial it back.

Now? Now is when you go for it. If it fails and you’re a part of the failure, then you know more about what’s coming next than almost everyone in the world. Which means you are on the forefront of the next major move. But that same bet is a terrible and amateur level one to make at this point in time.

There will come a day when it is time to get worried and bearish, but not today.

Should SPY not hold it’s current level of a 2.5% - 3.0% correction, then a 4% - 5% correction may be in the cards. Putting SPY around $570ish. I could see that happening into or maybe even as a result of initial reaction to NVDA earnings which will be reported on Wednesday after the market closes.

Which just so happens to align with the date in which markets have bottomed in November whether its an election year or not.

The Week Ahead

Economic Data to watch:

Earnings to watch:

WTF of the Week

Quote of the Week

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