Weekly Trader's Outlook

Stocks may be set up for a bout of volatility heading into Thanksgiving.

November 17, 2023 Nathan Peterson
The bulls continue to control momentum, but the technical set-up plus Nvidia earnings may translate into a bifurcated move next week.

Note: Due to the holiday-shortened week and light volume we will not be publishing a Weekly Trader's Outlook this Friday (November 24th) but will resume publication the following Friday (December 1st).

The Week That Was:

If you read last week's blog, you might recall that my outlook for this week was "Moderately Bullish," citing bullish momentum and bullish seasonality. At the time of this writing (Friday morning), the S&P 500 is up roughly 2.0% on the week, which was primarily driven by cooler-than-anticipated inflation data from Tuesday's Consumer Price Index (CPI) report. We also received some cautious commentary regarding the consumer from Walmart, some cautious guidance regarding enterprise spending from Cisco and Palo Alto Networks and evidence of some slack in the labor market from the Initial Jobless Claims report (231K, highest since August 18th). These data points suggest some softening in the economy, which the bulls are interpreting as further evidence that a "soft landing" will be achieved by the Federal Reserve.

Outlook for Next Week:

As Nvida goes, so goes the market? Perhaps, but it probably isn't fair to give an earnings report from any corporation that much importance. Of course, Nvidia is important to the markets because it represents the leader of the AI secular growth story, which is one of the bulls' pillars. As I mentioned in the SPX technical section below, the holiday-shortened Thanksgiving week tends to be lighter volume and potentially more volatile. The bulls appear to be in control, but we also might be a little near-term stretched to the upside. Therefore, my outlook for next week is "Breakout," which in my definition translates into +1.0-1.5% higher or lower on the SPX by next Friday's close.

Next Week's Potential Market-Moving Catalysts:


  • Tuesday (11/21): Existing Home Sales 
  • Wednesday (11/22): Initial Jobless Claims, Durable Goods Orders, University of Consumer Sentiment (Final) 


  • Tuesday (11/14): Lowe's Companies (LOW), Medtronic (MDT), Best Buy (BBY), DICK'S Sporting Goods (DKS), Nvidia Corp. (NVDA), Autodesk Inc. (ADSK)
  • Wednesday (11/15): Deer & Co. (DE)  

Economic Data, Rates & the Fed:

Inflation data was the primary driver for stocks this week. Every CPI metric (headline, core, month-over-month and year-over-year) came in 0.1% below estimates with the core CPI increasing at the smallest level (4.0%) since September of 2021. Yields on the 10-year correspondingly fell and closed below the 4.50% level on Tuesday for the first time since September. The bullish response is a reminder that the primary market driver is still yields, the trajectory of inflation and the Fed's positioning within this cycle. Wednesday's report on prices at the wholesale level confirmed the dis-inflationary theme as October's Producer Price Index registered the largest monthly decline (-0.5%) since April of 2020.

According to Bloomberg, the probability of a Fed rate hike at either the December or January Federal Open Market Committee (FOMC) meeting currently stands at 0%, which is down from 28.3% last Friday. Looking further out in time, Bloomberg probabilities suggest a rate cut at either the May or June FOMC meeting in 2024 (using 65% probability as the threshold).

10-year Treasury yields have traded in a range of 4.404-4.696% this week and are hovering around the lower end of the spectrum (4.444%) at the time of this writing. This month, the 10-year yield dropped below its upward-trending 50-day Simple Moving Average (SMA), which can signal a change in trend, meaning the uptrend may be shifting to a sideways trend or potentially a downward trend.

Technical Take:

S&P 500 (SPX + 1 to 4,509)

First, let's acknowledge that the SPX is up ~7.5% so far this month, which may suggest that at some point we may be due for a mean-reverting pullback. Having said that, the momentum still appears to be bullish, as evidenced by the positive closes over the past three days, and seasonality favors the bulls. We will only have three and a half trading days next week (markets will be closed on Thursday for Thanksgiving and Friday is a half day), so expect volume to be relatively light which may translate into higher volatility (either higher or lower). Over the past 10 years, the SPX has closed higher on Thanksgiving week 80% of the time with a 0.92% average gain. However, in the two years in which the SPX closed lower, the losses were significant: -3.80% in 2018 & -2.19% in 2021. Given this history, the technical set-up (i.e. momentum is bullish but perhaps a bit stretched), along with a key earnings report from Nvidia on Tuesday, my outlook for next week is "breakout." I would define breakout for this set-up as either 1.0-1.5% higher or lower on the SPX by next Friday's close. Near-term technical translation: breakout  

Source: Schwab StreetSmart Edge®

Past performance is no guarantee of future results.

Russell-2000 (RUT + 23 to 1,797)

I feel that we potentially witnessed a significant bullish development in the RUT this week. First, the index gapped up above its 50-day SMA and held above the indicator. Next, and perhaps more importantly, it appears that we broke the neckline on a (bullish) head-and-shoulders bottom formation on the chart. Additionally, the head of this formation coincides with 1,650, a key support level for this index over the past 18 months. Yields will likely continue to be an important influence on this rate-sensitive index, but this week's development is technically bullish. Near-term technical translation: bullish  

Source: Schwab StreetSmart Edge®

Past performance is no guarantee of future results.

Market Breadth:

Market breadth attempts to capture individual stock participation within an overall index, which can help convey underlying strength or weakness of a move or trend. Typically, broader participation suggests healthy investor sentiment and supportive technicals. There are many data points to help convey market breadth, such as advancing vs. declining issues, percentage of stocks within an index that are above or below a longer-term moving average, or new highs vs. new lows.

Below is a Bloomberg chart showing the percentage of members in the S&P 500 (white line – 67.66%), Nasdaq Composite (blue line – 46.35%) and Russell 2000 (red line - 57.49%) that are trading above the 50-day SMA. As you can see on the right side of the chart, we saw quite a large breadth thrust this week following Tuesday's CPI report. Relatively speaking, this is an encouraging development for the bulls, but we remain below the highs seen back in February and July earlier this year.


Source: Bloomberg L.P.

This Week's Notable 52-week Highs (98 today): Abercrombie & Fitch Company (ANF + $4.63 to $73.61), Cameco Corp. (CCJ + $0.61 to $44.55), General Electric Company (GE + $0.19 to $119.13), Hilton Inc. (HLT + $0.73 to $167.90), International Business Machines Inc. (IBM + $0.02 to $153.08), Ross Stores Inc. (ROST + $10.63 to $130.78), Wingstop Inc. (WING + $2.95 to $230.67)

This Week's Notable 52-week Lows (78 today): Canadian Solar Inc. (CSIQ - $0.29 to $20.22), ChargePoint Holdings Inc. (CHPT - $1.14 to $1.98), Chevron Corp. (CVX + $1.31 to $143.08), Green Plains Inc. (GPRE - $0.09 to $25.01), Kroger Company (KR - $0.42 to $42.24), Pfizer Inc. (PFE + $0.07 to $29.84), Zim Integrated Shipping Inc. (ZIM - $0.19 to $7.08)

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. Call Schwab at 1-800-435-4000 for a current copy. Supporting documentation for any claims or statistical information is available upon request.

Futures and futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement for Futures and Options prior to trading futures products.

Investing involves risks, including loss of principal. Hedging and protective strategies generally involve additional costs and do not assure a profit or guarantee against loss.

The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation. Data here is obtained from what are considered reliable sources; however, its accuracy, completeness or reliability cannot be guaranteed.

All references to subjects (securities, indexes, futures contracts, and options contracts) were derived based on screens conducted by the writer for certain anomalous activity such as volumes, volatility and other related market data. As needed for brevity, the writer may have applied discretion when choosing among screen outputs for inclusion. Such discretion may have been based on news reports or other considerations of public interest. The views or opinions are those of the writer, and are subject to change without notice. All referenced subjects were chosen for illustrative purposes only and should not be considered recommendations, offers to sell, or solicitations of offers to purchase.

Please note that this content was created as of the specific date indicated and reflects the author's views as of that date. It will be kept solely for historical purposes, and the author's opinions may change, without notice, in reaction to shifting market, economic, business, and other conditions.

This information provided here is for general informational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

Past performance is no guarantee of future results.

Digital currencies, such as bitcoin, are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view Bitcoin as a purely speculative instrument.

Schwab does not recommend the use of technical analysis as a sole means of investment research.

​Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Commodity-related products carry a high level of risk and are not suitable for all investors. Commodity-related products may be extremely volatile, may be illiquid, and can be significantly affected by underlying commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions.

All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

Indexes are unmanaged, do not incur management fees, costs, and expenses and cannot be invested in directly. For more information on indexes please see schwab.com/indexdefinitions.