Equity trends remain bullish but fragile as we near the end of October. Stocks, Treasury yields, and the US Dollar look to all be close to beginning a corrective pullback, which likely starts in early November but should prove short-lived and not the start of a larger decline. Minor pullback attempts this week have failed to do much damage but should ultimately result in 5-7% declines in US Equities for the month of November. While intermediate-term bullish thesis remains very much intact, it’s doubtful that US Equities will continue to push up into and post-election without any consolidation. Risk/reward seems poor in the short run, and SPX seems unlikely to exceed 6000 right away but could find initial resistance near 5900-5935. Meanwhile, QQQ should find resistance at 503-505.
I expect that Tuesday’s beat from GOOGL 3.15% likely could help to lead Technology up further over the next 1-2 weeks ahead of a possible post-election consolidation.
Market breadth proved negative on Tuesday, with nine sectors out of 11 lower on an Equal-weighted basis.
However, if what I’m thinking is correct, markets are likely to have yet another move higher into early-to-mid-November ahead of a possible pullback.
Most of the assets which have been described by the financial media as being “Trump Trades” could possibly reverse under a “buy the rumor, sell the news” type scenario.
Overall, Tuesday’s late day strength was a positive, despite the negative breadth and I expect this likely continues into next week. Getting over 5863 should drive SPX up potentially another 75-100 points into early November before a stalling out.
S&P 500 Index
Top Picks Technical Writeups
NVIDIA- NVDA -1.61%
-Three-month triangle consolidation broke out on 10/7, leading NVDA back to new highs.
-Minor consolidation since 10/21 now looks to be resolved by an upside breakout which should lead NVDA up to 147-150 initially, with a likely move to 155.50 being a maximum advance before consolidation in November.
-Any weakness post-US Election likely will find strong support at $131 near former August peaks.
-Rally might require consolidation in late November, but NVDA remains the best within its peer group and eventual intermediate-term targets lie near $165, then $180.
Meta Platforms – META -2.22%
– Mid-September breakout helped to resolve the consolidation since February, proving a bullish breakout which leaves META attractive at/near all-time highs.
-Weekly MACD has turned back to positive territory, given the strength of September.
-META -2.22% has only experienced four negative months out of the last 23, with just one of those having undercut a prior monthly low.
-Resistance at $600 arguably should be exceeded into early November, and the price could push higher to either $615 or $627 before consolidating. Larger targets are found near $684, an alternate Fibonacci-based projection target.
-October lows at $568 look important and should not be breached right away, as META turns back higher into early to mid-November.
-Given the possible five-wave Elliott-wave style advance, which might be complete in mid-November, a 38% retracement looks possible starting in mid-November, which should make META appealing on weakness.
Tesla- TSLA -0.89%
-This week’s early breakout looks to have jumpstarted the momentum after a few months of range-bound trading.
-TSLA’s progress in July successfully broke out of the entire downtrend from 2021. Following four weeks of consolidation post-breakout, the stock finished at the highest weekly closing levels since Fall 2023.
-Trends and momentum have improved on TSLA’s steady progress in recent months, and monthly MACD has just broken its signal line and has turned bullish.
-Remains highly attractive technically, given the combination of a short-term burst of momentum off the lows combined with its intermediate-term constructive pattern breakout.
-Movement over $265 should propel TSLA higher to $296-300, then $364, then $395-414 before an eventual test and breakout back to new all-time highs.
UBER Technologies – UBER 0.87%
-Rally back to new all-time high territory helped to improve UBER’s technical pattern, and recent consolidation over the last two weeks makes this quite technically appealing from a risk/reward perspective.
-Last week’s weekly close at $77.62 successfully held the uptrend from early August and should lead UBER back to new highs.
-Weekly MACD has turned back to positive on UBER’s breakout, and Elliott-wave patterns suggest another pushback to new highs into mid-August before possible consolidation.
-Gains back to new all-time highs are likely, with initial resistance near $87, then $94.
-Only a move back under $71.90 would postpone a rally, in my view, and overall weakness not expected until late November.
Amazon – AMZN 0.75%
-Recent triangle pattern should be resolved by a bullish breakout given that price is nearing the apex of its triangle pattern.
-AMZN’s long-term pattern remains quite constructive, as the stock simply consolidated near its prior all-time highs from November 2021. Monthly momentum gauges have not been affected by AMZN’s three-month consolidation.
-AMZN’s churning since July has helped to alleviate overbought conditions while not causing any technical damage to its ongoing two-year uptrend.
-The act of getting above $195 looks increasingly likely, technically and should help momentum improve on a short-term basis as price pushes higher to test and exceed July highs at $201.20.
-AMZN’s pattern since August shows an ongoing five-wave advance which should be in its final wave up into November before consolidating.
-Gains look possible to $201 initially before reaching $206.
-The fact that AMZN consolidated near 2021 peaks and now looks set to break out above this level back to new highs makes this quite bullish, technically speaking.
SUPER SMID
AppLovin – APP -0.87%
-APP is the strongest name technically of any of the stocks that make up the SMID-Granny Portfolio.
-The expansion of volume during the stock’s rally in September proved to be a valuable “Tell” and quite bullish for shares.
-APP’s more than doubling in price since early September shows extreme bullish momentum, which hasn’t shown any evidence of starting to reverse. Overbought conditions not accompanied by weakness of any sort are typically right to ignore.
-Upside target lies near $191 with an outside chance of $205, which might be important if reached in mid-November.
-Following gains in seven of the last eight weeks, some evidence of consolidation is necessary before turning negative or attempting to avoid APP.
Palantir – PLTR -5.05%
-Palantir has rallied to within striking distance of intra-week all-time highs from early 2021, but those are likely to be surpassed given its expansion in volume and continued good structure.
-The gains of the last six months have helped to radically change PLTR’s technical situation for the better after a lengthy base-building effort since 2021.
-Rallies to challenge $50 look likely, with $55 also a possible target in the months ahead.
-Until some evidence of mean reversion gets underway, PLTR’s technical structure remains quite positive and its move should be respected, regardless if momentum is overbought.
Microstrategy – MSTR -7.59%
-MSTR pushed back to new highs rapidly ahead of Bitcoin itself as BTC began to gain momentum in September.
-the act of exceeding $183.70 proved to be a legitimate breakout of the entire pattern since early 2024.
-Initial upside targets in price lie near $289.50, and the recent Bitcoin breakout should allow this to be challenged before any pullback from overbought territory.
-Weekly DeMark indicators show a peaking process to be premature for MSTR, and this should still be able to push higher into mid-November without much weakness.
TG Therapeutics – TGTX -4.05%
-TGTX has gradually begun to show more technical strength following a lengthy base-building process throughout much of 2024.
-Its July 2024 breakout to the highest weekly close since May was instrumental in jumpstarting momentum.
-Its success in recouping $23 is significant as this represents an arithmetic trendline connecting former 2021 peaks with May 2024 highs.
-The gains in recent weeks should help TGTX push higher to test $35.67 initially with intermediate-term targets at $45, then $56.74.
Mannkind – MNKD 2.77%
-MNKD is just exceeding a base that’s been building since early 2021 over three years ago and breaking out above $6.25 is quite constructive for its larger pattern.
-Rallies up to $7.85 look possible initially and movement above there should lead up to $8.25, then $9.45.
-Volume expansion which happened in late August was particularly helpful towards confirming recent gains, and this volume expansion has continued this past week on its latest short-term breakout attempt.
-The act of exceeding $6.85 should help this push up to $7.85 without much trouble.
