SYS Research – Weekend Report – November 12, 2023

Notice: The weekend report is provided for informational purposes only and is not intended as a stock-picking service. The charts and information provided are intended to aid research and analysis and should only be used as indicators. They should not be considered as a direct trigger to buy or sell any security. The creator assumes no responsibility for any actions readers take and strongly advises each individual to fully understand the risks and potential consequences before making any investment decisions. Please note that the charts shared are not intended as signals to buy or sell but as a tool to add to your watchlist and analyze according to your trading ability. Remember that not all charts will result in buy or sell actions at any time.

Just a friendly reminder: The sector watchlists are updated every weekend. You may want to consider dedicating time to reviewing and creating your watchlist. Also, it’s essential to keep an eye on the Daily Setups and Workspace scan results, which can provide insights into potential future additions to stay ahead of the game.

If you’re facing challenges understanding the Daily Setups or need help crafting a trading strategy, don’t hesitate to ask for assistance. You can contact us via email at info@setyourstop.com or reach me through the Workspace. Let’s schedule a meeting to address your specific requirements and provide you with the guidance you need.

Sample Trading System

The following trading system is presented as an educational example and should not be interpreted as financial advice. Past performance does not guarantee future results, and trading involves inherent risks. Please consult with a qualified financial advisor before implementing any trading strategies.

SYS Daily Report – Weekend Edition

 

Market Rebounds Strongly After Brief Retreat, Tech Leads the Charge

Investors appear to be navigating a delicate balance between embracing stocks and being nudged into the market by what is commonly termed the “wall of worry.” This phenomenon captures the dynamic where hesitant sideline cash, initially driven by fear and caution, is compelled to enter the market as performance surges. This situation leaves underinvested sideline managers grappling with growing concerns as performance surges away from them. The market’s upward momentum hinges on the continuous influx of fresh capital, and the wall of worry serves a crucial role in facilitating this dynamic. Essentially, the wall of worry is a source of liquidity that propels the market to new highs as previously cautious funds are forced into the market. In light of these dynamics, there is a notable potential for a year-end rally, even amid lingering uncertainties. In a robust resurgence on Friday, stock market action seemed to affirm this scenario, rebounding from Thursday’s dip and propelling major indexes past October highs, securing weekly gains. The tech-focused Nasdaq Composite took the spotlight with its most impressive single-day surge since May, surging 2% and triumphing over the horizontal resistance line marked by the 100-day moving average we’ve been monitoring.

Indexes

The Nasdaq Composite’s remarkable 2% leap marked its most significant daily percentage gain in over five months, underscoring a notable resurgence in the tech sector. This positive momentum resonated across all three major indexes, culminating in the Nasdaq closing the week with a commendable 2.4% increase. Notably, price action successfully reclaimed the horizontal resistance line, and the moving averages are now positioning for a potential bullish cross.

Nasdaq – Daily Chart

Despite lingering concerns about market breadth, all 11 sectors of the S&P 500 demonstrated resilience on Friday, notably led by information-technology stocks, reaffirming their dominance in our setups section of the report. The chip sector gained momentum, driven by Taiwan Semiconductor Manufacturing’s report of a substantial increase in October sales. Stocks on our watchlist, such as Advanced Micro Devices and Nvidia, continued their upward trajectory, while Broadcom achieved a record high. The S&P 500 recorded a significant 1.6% increase on the day, contributing to a weekly gain of 1.3%. Additionally, price action successfully reclaimed the horizontal resistance line, and the moving averages are now aligning for a potential bullish cross.

S&P 500 – Daily Chart

The Dow Jones Industrial Average demonstrated strength, adding nearly 400 points or 1.2% on Friday, resulting in a 0.65% weekly rise.

Dow Jones Industrial Average – Daily Chart

Conversely, the small-cap Russell 2000 faced headwinds, recording a 3.08% weekly decline despite a 1.1% bounce on Friday, remaining ensnared beneath its moving averages.

Russell 2000 (ETF) – Weekly Chart

As highlighted in our setups section, market leadership remains robust, particularly in the tech sector. While concerns about market breadth persist, a brief pause in the ongoing rally seemed likely on Thursday but was swiftly curtailed by bullish sentiment. Advancers outnumbered decliners by nearly 3-to-1 on the New York Stock Exchange but by less than 2-to-1 on the Nasdaq. The Green-light/Red-light breadth system closed the week with a positive signal, supported by all other indicators on the chart surging above their moving averages alongside the SSIH turning higher. Maintain vigilance on your watchlists as several of our setups persist in ascending above their moving averages in alignment with system rules. It is imperative to be prepared for potential breakout moments or instances when new setups push higher above their trigger lines, as identified on the charts.

Breadth

SSIH

The bond markets’ influence on stocks was again displayed this past week. On Thursday, a $24 billion auction of 30-year U.S. Treasury bonds showed some cracks in demand. Primary dealers were forced to accept 25% of the offering, more than double the average over the past year. The auction had a large tail, meaning the Treasury needed to entice buyers with a premium yield over where 30-year bonds were trading in the open market. The S&P 500, which had been rallying, fell 0.8% that day. It’s a potential preview of what’s to come. The federal government ran a deficit of $1.7 trillion in its fiscal 2023, which ended in September, more than its entire debt load in 1985. Heavy borrowing means lots of Treasury issuance, just as the two biggest buyers of the past decade are largely out of the market—the Fed is doing quantitative tightening, and China has other issues. Turns out, demand for Treasuries isn’t limitless, which keeps me bullish on the price of Bitcoin. A failed Treasury auction is what should keep everyone up at night as it would certainly be a Minsky moment, using a term that refers to a market collapse brought on by the sudden unwinding of excessive debt. Late Friday, Moody’s Investors Service cut its U.S. outlook to negative from stable, citing high budget deficits and political polarization. Moody’s reaffirmed, for now, its AAA rating on U.S. sovereign debt. The yield on the 30-year Treasury note dropped 3.2 basis points to 4.733% after factoring in new issue levels. For the week, the rate was down 1.7 basis points. It’s dropped 35.4 basis points over the last three weeks, the largest decline for such a length of time since the period that ended on December 9, 2022. The yield on the 2-year Treasury note rose 3.8 basis points to 5.040% from Thursday’s level of 5.022%, climbing further into its highest level since October 31st for the week. The yield jumped 23.2 basis points, the largest weekly gain since May.

Bond Yields

It’s the middle of earnings season, but the Treasury market is doing more to move the stock market than any company fundamentals. The bond market stabilized on Friday, with the benchmark 10-year Treasury yield settling at 4.627%, from 4.629% on Thursday. It rose 7 basis points this week and reclaimed its 50-day or 10-week moving average. Markets will continue to be very choppy until we get better clarity on the next policy action as we witness this intriguing tango between the Fed and the market.

10-Year US Treasury Yield

On Friday, the U.S. dollar engaged in a nuanced interplay with major currencies, prompted by Federal Reserve Chair Jerome Powell’s remarks hinting at potential rate hikes in response to persistent inflation. The dollar experienced a dip against the euro but gained ground against the yen, marking a 0.16% uptick to 151.59 yen, reaching levels unseen since November 1st. The Japanese currency, hovering near a one-year low of 151.52, fueled speculation about potential intervention amid its most challenging week since August, with the dollar appreciating by 1.48% over the week.

Meanwhile, the euro remained resilient despite dollar movements, recording a modest 0.10% gain, reaching $1.067 and scaling a 15-year high of 161.95 yen on Friday. Sterling, however, faced challenges, grappling with a one-week low against the dollar and poised for a weekly decline of 1.2% following subdued growth data from Britain’s economy in the third quarter. On the North American front, the Canadian dollar exhibited little change on Friday, with its trajectory below 1.38 indicating some resilience. Despite this, the Loonie’s susceptibility to external forces persists, given the absence of significant domestic data or imminent catalysts on the horizon, despite Thursday’s gains partially fueled by a surge in U.S. yields.

Currencies

Technically, the U.S. dollar is in consolidation, taking the form of a bull flag continuation pattern, with its price reclaiming the 10-week moving average for now. Stay tuned for further developments.

US Dollar – Weekly Chart

In the energy sector, U.S. crude oil futures experienced a 4.15% decline last week, settling at $77.17 a barrel. However, a late-week bounce occurred as prices touched the wedge breakout line, identified as the red dotted line on the chart. Caution prevails, as the bulls want to avoid any further downside breach of this trendline.

Crude Oil – Weekly Chart

Canada’s primary stock index experienced a turnaround, closing higher on Friday with a notable surge in energy stocks, attributed to the rise in oil prices. The TSX composite index ended the day higher by 67.06 points, or 0.34%, settling at 19,654.47. However, despite this positive daily performance, the index recorded a weekly decrease, closing below its 100-day or 20-week moving average, following its most substantial weekly gain since April 2020 in the previous week. Meanwhile, the technology sector in Canada is demonstrating a resurgence, mirroring the strength observed in the U.S. This trend suggests a potential for market leadership in the upcoming period. Notably, The Descartes Systems Group, highlighted in our setups last week, signaled a significant breakout, underlining the evolving landscape of market opportunities.

TSX – Weekly Chart

The price action in gold had a challenging week, closing down 3.08%, negating any potential bullish chart outcome for the time being.

Gold – Weekly Chart

The price action in Bitcoin remains bullish as it sits just below a new 18-plus month high.

Bitcoin – Daily Chart

Sector Watchlist Highlights: Weekend Chart Setups

In this segment of the weekly report, we delve into the setup section. As a friendly reminder, our sector watchlists receive updates every weekend, and we strongly encourage you to review these updates and craft your own watchlist based on the information provided. It’s also worth highlighting that monitoring the Daily Setups and Workspace scan results can yield valuable insights into potential future additions, potentially giving you a competitive advantage in the market.

Reviewing last week’s performance, technology and communication services emerged as the strongest performers, while energy and utilities experienced the most significant losses. As mentioned earlier in the report, technology stocks reaffirmed their dominance in our setups section, with the chip sector gaining momentum. Many of the setups today are charts that were initially posted when they first started to break above the horizontal resistance or trigger line, as identified on the charts. Notably, these charts continue to exhibit positive momentum and outperformance.

What Worked Last Week

Technology

Link – Technology Watchlist

AAPL – Apple, Inc.

Apple maintains its breakout from the consolidation pattern we’ve emphasized since the trigger line, suggesting sustained upward momentum.

LINK TO CHART – https://schrts.co/UsqtNsPn

 

CRWD – CrowdStrike Holdings, Inc.

CrowdStrike is attempting to breakout, potentially transitioning to a new 52-week high.

LINK TO CHART – https://schrts.co/NKwtubdb

 

DELL – Dell Technologies, Inc.

The Dell setup we highlighted earlier is now pushing into a new 52-week high, signaling positive momentum in the stock.

LINK TO CHART – https://schrts.co/ZNsuYgWG

 

XLK – Technology Select Sector SPDR Fund

The Technology Select Sector SPDR Fund ETF, which we highlighted when it initially signaled with a push above the upper trendline of the continuation pattern, continues to accelerate higher.

LINK TO CHART – https://schrts.co/zQXHICNT

Software

Link – Software Watchlist

ADBE – Adobe Systems, Inc.

Adobe is positioning itself not far from its all-time highs. Keep a close eye for potential acceleration in upside momentum.

LINK TO CHART – https://schrts.co/FRDcmbVv

 

DDOG – Datadog Inc.

Datadog is currently consolidating after a bullish earnings report. Keep a watchful eye for a potential initiation of an uptrend.

LINK TO CHART – https://schrts.co/tPFamttA

 

MSFT – Microsoft Corp.

Microsoft is another setup we’ve been monitoring since it started to break out above the upper trendline of the continuation pattern. Price action is now achieving a new all-time high. This serves as a reminder not to get distracted by predicting index movements. Microsoft has consistently risen above a moving average as per system rules, demonstrating resilience and making new all-time highs despite the media’s varied predictions of bull and bear market scenarios.

LINK TO CHART – https://schrts.co/aBRuwcZe

 

NOW – ServiceNow, Inc.

ServiceNow is another setup that was first flagged when the price started breaking above the upper trendline of its continuation pattern. The price action is persistently reaching new highs.

LINK TO CHART – https://schrts.co/RvFqxtXb

 

PLTR – Palantir Technologies, Inc.

Palantir is attempting to trend higher from a bull flag situated above the upper trendline of its larger continuation pattern.

LINK TO CHART – https://schrts.co/kSgjqTHY

 

UBER – Uber Technologies, Inc.

Uber, another setup on our watchlist, gained heightened attention after its bullish earnings report. The price action is currently breaking out to a new 52-week high.

LINK TO CHART – https://schrts.co/VyNZIhgJ

Semiconductors

Link – Semiconductors Watchlist

AMD – Advanced Micro Devices, Inc.

AMD has been on our radar since its bullish earnings report when price action began setting up below the upper trendline of the continuation pattern. Now, the price action is accelerating higher.

LINK TO CHART – https://schrts.co/HTKmqHkj

 

AVGO – Broadcom Inc.

Broadcom, a setup consistently featured in our daily reports, has now broken out, reaching a new all-time high in its price action.

LINK TO CHART – https://schrts.co/TdqrQRaa

 

IDCC – InterDigital Inc.

InterDigital is showing signs of breaking out above a trendline, hinting at a potential uptrend continuation.

LINK TO CHART – https://schrts.co/CqMBIUyD

 

NVDA – NVIDIA Corp.

NVIDIA persists in threatening to break out from its consolidation/continuation pattern, indicating potential upward movement.

LINK TO CHART – https://schrts.co/YJqBeuzK

 

SMH – VanEck Vectors Semiconductor ETF

The VanEck Vectors Semiconductor ETF is currently attempting to break out from a notable continuation pattern, signaling potential upward momentum.

LINK TO CHART – https://schrts.co/UcPhrmhS

 

TSM – Taiwan Semiconductor Mfg

Taiwan Semiconductor is breaking out from a substantial bottoming wedge, propelled by a positive earnings report, marking a noteworthy development.

LINK TO CHART – https://schrts.co/SaECuBhx

Crypto (Bitcoin) Related

Link – Crypto (Bitcoin) Related Watchlist

BITW – Bitwise 10 Crypto Index Fund

Keep an eye on the Bitwise 10 Crypto Index Fund ETF as it remains noteworthy, riding the momentum in the crypto space.

LINK TO CHART – https://schrts.co/JxHVjawj

 

COIN – Coinbase Global Inc.

Coinbase, a setup that may have filled your feeds as it was posted repeatedly in the daily reports, is now breaking in price action, signaling a potential continuation of the uptrend that began from the 2023 low.

LINK TO CHART – https://schrts.co/IPRpUCHs

 

MARA – Marathon Digital Holdings Inc

Marathon Digital is forming a round bottom pattern accompanied by bullish volume and a positive earnings report. Keep a close watch for potential breakout signals.

LINK TO CHART – https://schrts.co/VtunYsrW

 

MSTR – MicroStrategy Inc.

MicroStrategy is another setup we’ve been monitoring since it began pushing above the upper trendline of its wedge. The price action is now accelerating higher, reaching a new 52-week high.

LINK TO CHART – https://schrts.co/KBjUxTCs

Communication Services

Link – Communication Services Watchlist

META – Meta Platforms, Inc.

Meta is setting up below new highs on the right side of a significant basing pattern. Keep a close eye for potential breakout signals.

LINK TO CHART – https://schrts.co/wdcisBBY

 

NFLX – Netflix, Inc.

Netflix is another setup we began highlighting when the price started pushing above the upper trendline of its continuation pattern. The price action is consistently trending to new highs, aligning with the positive momentum in the technology sector.

LINK TO CHART – https://schrts.co/YevxrVUA

 

NTES – NetEase.com, Inc.

NetEase.com is attempting to trend higher from its continuation pattern. Note that earnings are scheduled for the 16th; caution is advised as there’s an inherent risk associated with holding through an earnings date.

LINK TO CHART – https://schrts.co/zIDIZaNG

Consumer Discretionary

Link – Consumer Discretionary Watchlist

AMZN – Amazon.com, Inc.

Amazon is another setup we highlighted when it signaled above the upper trendline of its wedge. Take note of this recurring theme; these patterns repeat themselves. Breaking above the upper trendline doesn’t guarantee success every time but allows for a plan with systematic rules. This report demonstrates that price action often aligns with moving averages like the 21-day exponential, showing the effectiveness of setups with consistent adherence to system rules, irrespective of sentiment towards the indexes.

LINK TO CHART – https://schrts.co/XqJMHHSF

 

BECN – Beacon Roofing Supply Inc.

Beacon Roofing Supply is setting up below the trigger line of a continuation wedge. Watch for a potential breakout.

LINK TO CHART – https://schrts.co/YRWCzDtt

 

WING – Wingstop Inc.

Wingstop is another setup we highlighted when the price action was setting up below the upper trendline of its falling channel. Since then, the price action has broken out and continues to establish new highs.

LINK TO CHART – https://schrts.co/GMxeRrCk

Industrial

Link – Industrial Watchlist

CDRE – Cadre Holdings Inc.

Cadre is exhibiting continued bullish behavior.

LINK TO CHART – https://schrts.co/TAKGGjFj

 

CECO – CECO Environmental Corp.

CECO Environmental, a setup highlighted last week, is worth monitoring as the breakout unfolds, potentially transforming into an uptrend.

LINK TO CHART – https://schrts.co/cbqvWMgM

 

FSS – Federal Signal Corp.

Federal Signal is setting up below new all-time highs. Keep a close eye for potential breakout signals.

LINK TO CHART – https://schrts.co/gYnWQGpU

 

FTAI – FTAI Aviation Ltd.

FTAI Aviation is another setup we repeatedly highlighted as the price action set up below the upper trendline of its continuation pattern. Now, price action is on the verge of breaking out to yet another new high.

LINK TO CHART – https://schrts.co/BKQdqzhS

 

GFF – Griffon Corp.

Griffon, highlighted in our daily reports as a wedge setup, is now threatening a breakout, aiming for a new all-time high.

LINK TO CHART – https://schrts.co/fDsdEufc

Materials

Link – Materials Watchlist

CCJ – Cameco Corp.

Cameco is still setting up below 52-week highs. Keep a close watch for the potential continuation of the uptrend.

LINK TO CHART – https://schrts.co/vVfnzKJV

 

LIN – Linde plc

Linde is on the verge of a breakout, threatening to reach a new all-time high from a significant basing pattern.

LINK TO CHART – https://schrts.co/DQytDYce

 

NEU – NewMarket Corp.

NewMarket is attempting to trend to new highs.

LINK TO CHART – https://schrts.co/upwkhIfW

 

URA – Global X Uranium ETF

The Global X Uranium ETF is shaping up with a bull flag retest pattern. Keep a close watch for potential continuation of the uptrend.

LINK TO CHART – https://schrts.co/XgPscFAs

Staples

Link – Staples Watchlist

COCO – Vita Coco Company Inc.

Vita Coco is consolidating in the form of a significant basing pattern below all-time highs. Watch for potential breakout signals.

LINK TO CHART – https://schrts.co/GhavTQfg

 

COST – Costco Wholesale Corp.

Costco is poised for a potential breakout to a new high.

LINK TO CHART – https://schrts.co/zAMKfjFE

 

WMT – Walmart Inc.

Walmart is currently positioned below its all-time highs. Watch for a potential continuation of the uptrend.

LINK TO CHART – https://schrts.co/dwFepVSq

To bring our report to a close, we thank you for your engagement and insights. Your feedback is of great value, and we encourage you to share your recommendations. Stay attentive to the Daily Setups, the Workspace, and the Watchlists for emerging opportunities. Additionally, be sure to explore the scanner result PDFs provided below. Until next time, happy trading!

US Scanner Results

Click on the CandleGlance chart to view it in full size. Find a chart that matches your criteria or interests. You can easily save it to your watchlist on StockCharts.com for further analysis and tracking or copy and paste the ticker list into your chart provider.

 

Canadian Scanner Results

Click on the CandleGlance chart to view it in full size. Find a chart that matches your criteria or interests. You can easily save it to your watchlist on StockCharts.com for further analysis and tracking or copy and paste the ticker list into your chart provider.

 

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