Stock Market Commentary & Analysis November 16, 2019

In the stock market, a new record moves take a broad S&P 500 index to 3,100 and Dow Jones to 28,000. The S&P 500 index jumped 0.9% into the close, DJI Average posted 1.2%, and heavy-technology loaded Nasdaq Composite increased 0.8 set brand-new records in this week trading. 

The majority of this week's increases came on Friday after National Economic Council Director Larry Kudlow announced a Phase One trade deal was imminent of being reached, while the Russell 2000 index with -0.2% was left aside of the market rally. 

The Director of Trade and Manufacturing Policy Peter Navarro and Commerce Secretary Wilbur Ross uttered similar viewpoints on a trade deal. Many other "people familiar with the talks," nonetheless, told effluent news outlets that both sides are fighting to overcome major points on exiting tariffs, agricultural purchases, as well as enforcement mechanisms.

In my humble opinion, there is no trade agreement. "Beijing balks at committing to specific purchases resists U.S. requests for tech-transfer curbs, enforcement mechanism.” The stock market should be down big time. But it is not. The case in point that stocks are at record highs for only one reason - Central bank money printing.

I trust you will catch-on. Also, there is no tie nowadays between the real economy (which by the way is falling), and the Federal Reserve money-printing scheme inflated the stock market. As we witnessed in 2000/2007, ultimately, the two will reconnect, and the outcome won't be pleasant.

The stock market in the nutshell

The stock market remained confident, yet somewhat very wary as capital money rolled into the defensive-oriented health care posting a 2.4% increase, the real estate gained 1.9%, and utilities painted 1.5% sectors. The market's most significant outperformance was the most prominent technology names such as Microsoft, Alphabet, and Apple seemed similar to a "safe" play. 

Big laggards involved the S&P 500 index energy sector with a negative 1.3% posting, financials sector print minus 0.3%, and consumer discretionary sector showing minus 0.2%. 

Cisco Systems, Inc. declined sharply on discouraging quarterly direction. In a well-received corporate message came out of Boeing, Walgreens Boots Alliance Inc., and Walt Disney Company.

S&P 500 Index

Click the Image to Enlarge

Technical Analysis and Outlook

The S&P 500 index 11th Phase is in progress to marked projection Outer Index Rally $3,125 (Act surprised - known to our reader since July 3, 2019)

The completion on Nov. 12 Inner Index Rally $3,100 was not validated by the 'TARC' - Trade Selector Signal system proprietary/copyrighted symbol. Therefore the index is open to migrating to our current Outer Index Rally $3,125, while additional expansion is marked at Inner Index Rally $3,168, and Outer Index Rally $3,215.

On the downside, primary support levels are Mean Sup $3,075, $3,040, and Key Sup $2987.

Other markets

Separately, U.S. President Trump's speech at the Economic Club of New York and Federal Reserve Chair Powell's two-day congressional deposition were two notable high-profile stories this week. Neither, though, gave the stock market information it did not previously know regarding trade deals, the monetary policy, and the economy. 

U.S. Treasuries ended the week on a higher note, which conveyed yields rates lower across the board. The two-year yield dipped five basis points to close at 1.61%, and the Ten-year yield faded ten basis points to conclude at 1.83%. The U.S. Dollar Index (DXY) declined by 0.4% to finish at 98.0. West Texas Intermediate (WTI) crude oil rose 0.9%, or $0.54, to close at $57.87 per barrel.

Gold and Silver market stabilized this week, consolidating the sizable declines incurring in the previous week. Gold advanced $7 from last Friday’s closure to finish at $1,468 trade, while Silver metal was up four cents over a similar period closing at $16.94. 

The Silver market seemed to have a more fixed underlying mode compared with Gold metal, and this can be read by Gold developing to be a lot more overbought than Silver at this time. What is so exciting, Open Interest (OI) is furthermore displaying a record level, notwithstanding the collapse in the Gold price, a unique aggregate condition indeed.

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