Weekly Watchlist Nov 10: Govt Shutdown & Market Pivotal Spot

Will we get a November rally again this year?

Welcome back to another Weekly Trade Plan with The Dividend Journal! If this is your first time here, great timing. This newsletter is your one stop briefing to stay ahead of the market and step into the week fully prepared.

🎯 Initial Thoughts + TLDR

A week into November and we have seen a deep pullback in the markets. This week we saw an insane 3% retrace in the markets but I don’t think we should rule out a bullish November yet. Historically, November has been the strongest month of the year and I still think that’s possible.

This week’s plan in a snapshot:

1. Eyes on government for an update on shutdown

2. Mid cap tech earnings

3. Technical support bounce on markets

📰 Key News to Watch

1. Government Shutdown

   The government shutdown reaches 40 days, which has not only delayed economic data but also furloughed over 750,000 federal workers. Any updates on the government shutdown this week can lead to a sense of relief in the markets.

2. Tariff Dividend Check

   President Trump has floated the idea of a $2,000 dividend check from the tariffs, which could spur economic activity. Keep an eye out on any substantial updates on this coming to fruition.

3. Technical Support in Markets

   After an aggressive pullback this week, Friday closed with some buyers coming in. For this show to go on, we need to see more buyers step in early this week.

50 Year Mortgage Option?

President Trump and is now proposing the introduction of 50-year mortgages which could lower payments on a $400,000 loan from $2,398 to $2,106 but raise total interest to over $860,000. This idea is an attempt to help solve the lack of housing affordability in the current market. With a lower monthly payment, more families could potentially purchase homes.

The interest paid on this long of a mortgage is just absolutely ridiculous and the equity build up is a lot slower too. This could be potentially good in the short term but long run could stall the housing market even more. With slower equity build up and rising debt, the maneuverability in the future with buying and selling a home just won’t be there. AND this isn’t even considering if your home value declines.

📅 Key Earnings & Economic Calendar

Earnings of interest: $CRWV, $RGTI, $CRCL, $NBIS, and $AMAT

Courtesy of Earnings Whispers:

Thursday, November 13: CPI & Unemployment Claims

Friday, November 14: PPI & Retail Sales

📈 Market Update: As of Friday, Oct 24

$SPY:

Within one week, we managed to test the daily 9, 21 and 50 EMA. This pullback was only a 3% move on the indices, but many risk on names like $QUBT, and tech names like $MSFT really suffered.

Bulls are not completely out the woods yet but Friday’s daily hammer of the daily 50EMA bodes well for the short term.

I am inclined to believe that this is not the signs of a deeper pullback yet. A big tell to me is that we have resounding strength in some large cap names like $JPM and $GS. $AXP has actually been one of the stronger bank names. $GOOGL has also been relatively strong too. Financials could lead the way first and then money could rotate into more tech names as November continues.

Bitcoin:

Much like equities, crypto has taken a huge hit as well. On the weekly timeframe, we have seen Bitcoin retrace all the way down the weekly 50EMA. A reclaim of the previous breakout ATH spot near 109k is crucial, otherwise, this could be the early signs of topping.

🔍 What I’m Watching

$SEDG:

Massive weekly base on top of a phenomenal earnings beat. $TAN as the solar ETF also shows resounding strength too. A weekly close over $40 is key for this rally to continue and make a recovery.

Trade Plan: 1/16 50C over 40.47 targeting 49+

$JPM:
Financials have been very strong, especially $JPM and $GS. Over the ATH spot at 316.47 is key for this trendline break and momentum to continue. Financials could honestly be the first leader for the November rally.

Trade Plan: 1/16 330C over $314.82 targeting 330+

$RTX:

This aerospace name has been extremely strong with an earnings gap up and continuing this uptrend. This previous week’s price action can be seen as a defense of the gap up level. A break of this triangle to the upside will be confirmed over 177.89 and full confirmation over the PEG level of 178.76

Trade Plan: 12/19 180C over 177.89 targeting 180+

$CRWD:

A perfect retest of the previous ATH base breakout spot at 518. This one is more observing to see if we get another pullback to that spot. If not, I’d be looking to see a break of the highs to trade this name. Software still seems to be very strong and can continue to be one of the leading sectors in the market.

📝Closing Thoughts

The early week price action will be VITAL to determine how the market will play out. If we don’t see confident buying from this Friday hammer close, it does not bode well for a clean reversal. There aren’t many good setups out there either, so if anything it will take at least another week to let things develop.

As always, trade responsibly and I will see you next week!