Market Momentum: Your Weekly Financial Forecast & Market Prep
Issue 22 / What to expect Nov 18, 2024 thru Nov 22, 2024
In This Issue
Market-On-Close: All of last week’s market-moving news and macro context in under 5 minutes.
Special Coverage: Why are cocoa futes ripping?
The Latest Investor Sentiment Readings: Is a Santa-rally still on the table?
Institutional Support & Resistance Levels For Major Indices: Exactly where to look for a turn in markets this weeek
Institutional Activity By Sector: Our latest readings & why you need to watch this every week
Top Institutional Orderflow: All of the heaviest-hit individual names targeted by institutions this week on Lit & Dark exchanges
Investments In Focus: Bull vs Bear arguments for APP, DLTR, SILV, JGRO, FCX
Top Institutionally-Backed Gainers & Losers: A dreamy watchlist for day traders seeking high-volatility this week
Normalized Performance By Thematics YTD (Sector, Industry, Factor, Energy, Metals, Currencies, and more)
Key Econ Events and Earnings On-Deck For This Week
Also, in an effort to be on your platform of choice, I’m now posting regular updates to Bluesky: https://bsky.app/profile/volumeleaders.bsky.social . If you’re on a platform that I’m not yet covering, let me know!
Market-On-Close
Markets Take a Pause Amid Inflation Concerns and Fed Policy Outlook
The global financial markets encountered a momentary lull in momentum this past week, as investor focus shifted back to inflation data and Federal Reserve policy. After a period of robust post-election gains, the S&P 500 surrendered approximately 2% over the week. Despite this setback, the index remains up over 23% for the year and has gained over 1% since Election Day. The narrative driving market sentiment is multifaceted, touching on inflation trends, central bank decisions, tariff policies, and broader economic performance.
Inflation: A Mixed Picture
Inflation has once again taken center stage in market discussions. October’s consumer price index (CPI) data showed headline inflation rising slightly to 2.6% year-over-year, compared to 2.4% in the prior month. Core inflation, which excludes volatile food and energy prices, held steady at 3.3%. While some components, such as energy, gasoline, and new vehicle prices, have eased, others like housing, rent, and motor vehicle insurance remain persistently elevated.
Progress in containing inflation is evident when compared to the 9.1% year-over-year peak reached in June 2022. However, the final leg toward the Federal Reserve's 2% inflation target is proving to be challenging. Persistently high services inflation, driven by labor market dynamics, suggests that the path forward will be uneven.
Looking further ahead, economic growth is expected to moderate, potentially easing inflationary pressures. Should pro-growth policies materialize in 2025 or 2026, inflation may stabilize within the 2%–3% range. For long-term investors, such an outcome, coupled with stable wage growth, could be a positive development, avoiding the spikes in inflation that have plagued consumers in recent years.
Tariff Uncertainty and Inflationary Risks
A recurring theme in inflation discussions is the role of tariffs. While tariffs are often viewed as a tax on consumers, their long-term impact on inflation tends to be muted. Historical examples, such as the tariffs on washing machines in 2018, demonstrate this. Initially, prices surged following the imposition of 20%–50% tariffs, but over time, these prices normalized. In some cases, tariffs have even spurred diversification
of supply chains, as foreign manufacturers relocated production to the United States. The incoming administration’s potential tariff policies have reignited debates around their inflationary effects. However, tariffs are often used as a negotiating tool rather than a long-term economic strategy. As such, their impact on broader inflation dynamics remains uncertain and may be less significant than feared.
Federal Reserve Signals Patience on Rate Cuts
Federal Reserve Chair Jerome Powell underscored the resilience of the U.S. economy during his remarks last week. Despite a slowing labor market, with unemployment at 4.1%, economic growth remains robust compared to other major economies. Powell’s comments suggested no urgency in cutting rates, reinforcing the perception that the Fed’s approach will remain measured.
This stance has tempered market expectations for future rate cuts. As of now, markets anticipate three quarter-point cuts through October 2025, with the federal funds rate expected to drop from its current 4.75% level to a more neutral range of 3.5%–4.0% next year. The gradual nature of these adjustments reflects confidence in the underlying strength of the economy and the Fed's commitment to maintaining inflation control.
Economic Data and Market Sentiment
Economic data releases this week painted a complex picture. Retail sales for October rose 0.4%, slightly above expectations, while September figures were sharply revised upward. Strong consumer spending continues to defy predictions of a slowdown, but it has also rekindled inflation fears.
Meanwhile, manufacturing data was mixed. The New York Fed's Empire State Manufacturing Index surged to 31.2 in November, indicating expansion, while industrial production fell 0.3% in October, partly due to temporary disruptions like the Boeing strike. Import and export prices also showed modest increases, reflecting the interplay of global supply chain dynamics and a strong U.S. dollar.
The bond market responded to these developments with a rise in the 10-year Treasury yield to 4.43%, its highest level in five months. This has added to the psychological barriers for equity markets, as higher yields make stocks less attractive by comparison.
Sector Performance and Corporate News
The dispersion of sector performance underscores the varying impacts of economic trends and policy developments. Technology stocks were among the weakest performers, with the PHLX Semiconductor Index down 3.5% for the week. Major players like Nvidia, Apple, and Microsoft all declined, weighed down by a stronger dollar, higher yields, and concerns about tariffs affecting semiconductor supply chains.
Healthcare stocks also struggled, driven by regulatory fears following the nomination of Robert Kennedy as health secretary. The biotech sector was particularly hard hit, with the Nasdaq Biotech Index down 10% for the week.
In contrast, financials and energy sectors showed resilience. Big banks like JPMorgan Chase and Wells Fargo benefited from expectations of deregulation, while energy stocks were supported by stable oil prices and robust demand. Defensive sectors such as utilities and real estate also managed modest gains, reflecting a cautious shift in investor sentiment.
Looking Ahead: Key Drivers and Risks
The coming weeks will bring critical data and earnings reports that could shape market sentiment. Housing data, retail earnings, and Nvidia’s results are among the headline events. Nvidia, in particular, remains a bellwether for the technology sector, and its guidance will be closely watched.
Policy uncertainty remains a significant overhang. The incoming administration’s tax and trade policies could have far-reaching implications for corporate earnings and market dynamics. Additionally, labor shortages and rising wages in key industries may introduce inflationary pressures, complicating the Fed’s policy path.
Conclusion: Climbing the Wall of Worry
As markets navigate the interplay of economic resilience, inflationary pressures, and policy uncertainty, the path forward is likely to be uneven. However, the underlying strength of the economy, combined with the Fed’s gradual approach to monetary policy, provides a solid foundation for long-term investors.
While short-term volatility is inevitable, especially as markets digest new data and policy developments, the broader outlook remains constructive. Pullbacks should be viewed as opportunities to position for continued growth, as the economy transitions to a more sustainable trajectory. In this environment, disciplined investing and a focus on fundamentals will be key to navigating the challenges and opportunities ahead.
Futures Markets Snapshots
S&P 500: Sector Insights
1. Technology Sector
Semiconductors: A clear underperformer, with major players like NVIDIA (-3.83%), AMD (-8.82%), and AVGO (-10.24%) seeing significant losses. This suggests profit-taking or concerns about valuation in the semiconductor industry, which had been a strong performer earlier this year.
Software: Mixed performance, with companies like Microsoft (-1.78%) down, while smaller players like PLTR (+12.46%) performed well. This indicates selective strength in smaller growth names versus larger mega-cap tech stocks.
2. Consumer Cyclical
Companies like Amazon (-2.68%) and Tesla (-0.16%) struggled, indicating cautious consumer spending or concerns about demand in a high-rate environment.
However, Home Depot (+0.56%) showed some resilience, likely due to continued strength in home improvement demand.
3. Communication Services
Meta (-5.98%) and Google (-3.32%) saw sharp declines, suggesting a negative sentiment toward digital advertising or concerns about future growth prospects.
Netflix (+3.64%) outperformed, likely reflecting optimism in its content strategy or subscriber growth.
4. Healthcare
A clear underperformer, with heavyweights like Eli Lilly (-10.26%), AbbVie (-17.30%), and Pfizer (-7.01%) sharply down. This suggests rotation out of defensive sectors or concerns about drug pricing, regulation, or earnings disappointments.
5. Financials
Positive sentiment overall, with major banks like JPM (+3.52%) and WFC (+6.14%) performing well. This indicates optimism about interest rate margins or resilience in the financial sector amid higher rates.
Credit services like Visa (+0.57%) also showed modest gains.
6. Energy
Mixed performance, with Chevron (+2.86%) showing strong gains, likely reflecting resilience in oil prices or company-specific strength.
ExxonMobil (-1.49%) lagged, suggesting some divergence among energy companies.
7. Consumer Defensive
Mixed sentiment here, with Walmart (-0.68%) and Coca-Cola (-3.41%) down, reflecting weakness in staples. This could indicate rotation out of defensive names.
8. Industrials and Materials
Broad weakness, with companies like GE (-4.26%) and Honeywell (-2.93%) down, reflecting concerns about industrial demand or the impact of higher rates on capital spending.
Basic materials also underperformed, with companies like LIN (-2.26%) and other chemical producers seeing losses.
9. Utilities
Utilities are down across the board, reflecting lower demand for defensive plays in a higher-rate environment as bond yields compete more directly with utility dividends.
Overall Market Sentiment
Risk-Off Rotation: Declines in technology, healthcare, and communication services suggest a broader risk-off sentiment or profit-taking.
Selective Strength in Financials and Energy: Financials and energy saw pockets of strength, reflecting optimism in rate-sensitive sectors and stability in energy prices.
ETF Insights
1. US Market Performance
Broad Decline in Major Index ETFs:
SPY (-2.08%), QQQ (-3.42%), and DIA (-1.27%) indicate negative sentiment across the broader market.
Tech-heavy QQQ experienced the largest decline, reflecting weakness in growth-oriented sectors.
Mid- and Small-Cap Underperformance:
IJH (-2.67%) and IWM (-2.99%) underperformed relative to large caps, suggesting investors are retreating from riskier, smaller companies.
2. Sector ETFs
Technology:
XLK (-3.56%) and SOXX (-8.71%) highlight significant weakness in technology and semiconductors.
However, the leveraged inverse ETF SOXS (+30.41%) shows strong demand for hedges or bearish bets on the semiconductor sector.
Healthcare:
XLV (-5.55%) and XBI (-11.85%) reflect substantial declines, with biotechnology particularly hard hit.
This suggests concerns about healthcare innovation or profit-taking in a high-rate environment.
Energy:
XLE (+1.04%) and XOP (+0.59%) performed positively, supported by stability in oil prices. This sector continues to benefit from resilient demand and constrained supply.
3. Leverage and Inverse ETFs
Bearish Sentiment:
Inverse ETFs like SQQQ (+10.94%) and SPXS (+7.16%) have gained significantly, indicating increased hedging or bearish positioning.
Leveraged long ETFs like TQQQ (-6.41%) and UPRO (-6.43%) saw sharp declines, further emphasizing the shift to risk aversion.
Risk-Aversion in Small Caps:
TZA (+12.76%), the leveraged inverse small-cap ETF, shows strong gains, reflecting bearish sentiment toward small-cap stocks.
4. Fixed Income
Bond Weakness:
TLT (-2.61%) and IEF (-0.93%) reflect declining bond prices and rising yields, continuing the pressure from a tightening monetary environment.
High-yield bonds like HYG (-0.71%) also fell, showing risk aversion across credit markets.
Short-Duration Bonds Hold Steady:
BIL (+0.06%) and SHV (+0.04%) performed better, reflecting demand for cash-like instruments amid rising rates.
5. Commodities
Gold and Precious Metals Decline:
GLD (-4.58%) and SLV (-3.19%) indicate selling pressure in safe-haven assets, possibly due to rising real yields and a stronger USD.
Energy Stability:
Crude oil-related ETFs like XLE (+1.04%) and XOP (+0.59%) show resilience, aligning with ongoing demand in the energy market.
6. Cryptocurrency ETFs
Crypto Resurgence:
Bitcoin ETFs like FBTC (+19.17%), GBTC (+19.17%), and BITO (+19.13%) surged, reflecting renewed interest in digital assets.
7. International Markets
Broad Weakness:
Developed markets (EFA -2.56%) and emerging markets (EEM -3.81%) declined, signaling concerns about global growth.
China-related ETFs like FXI (-4.19%) and YINN (-13.88%) were hit especially hard, reflecting ongoing economic challenges in China.
8. Dividend and Value Strategies
Dividend ETFs Underperform:
SCHD (-2.56%) and VYM (-1.36%) fell, reflecting concerns about income-oriented strategies amid rising yields.
Value ETFs More Resilient:
IWD (-1.18%) and other value-focused ETFs held up better than growth ETFs, suggesting a preference for stability.
Overall Sentiment
The heatmap reflects risk-off sentiment:
Weakness in equities, especially tech and growth-oriented sectors.
Demand for inverse ETFs and cash-like instruments.
Resilience in energy and renewed interest in crypto as outliers.
Special Coverage: Why Cocoa Futes Are Ripping
Cocoa futures have experienced a significant surge recently, primarily due to a combination of supply constraints and increased demand. The key factors contributing to this rise include:
1. Adverse Weather Conditions in West Africa: West Africa, particularly Ivory Coast and Ghana, accounts for approximately 70% of global cocoa production. The region has faced unfavorable weather patterns, including intense heat and irregular rainfall, leading to poor harvests. This has resulted in a 14.2% drop in global cocoa supply for the 2023/24 season, marking the lowest cocoa stocks in 22 years.
2. Increased Farmgate Prices: In response to the declining production and to support farmers, both Ghana and Ivory Coast have raised the fixed farmgate prices for cocoa. Ghana increased its price to 49,600 Ghanaian cedi per metric ton, up from 48,000 cedi set in September 2024. Similarly, Ivory Coast raised its price by 20% to 1,800 CFA francs per kilogram for the new season’s main crop.
3. Supply Chain Disruptions and Smuggling: The supply shortage has led to increased smuggling activities, with significant quantities of cocoa beans being illegally transported across borders. For instance, Ivory Coast's Coffee and Cocoa Council seized 33 trucks carrying about 1,100 tonnes of smuggled cocoa beans. Such activities further strain the available supply and contribute to price volatility.
4. Rising Demand Amid Limited Supply: Despite higher prices, consumer demand for chocolate products remains robust. Manufacturers are facing challenges in meeting this demand due to the constrained supply, leading to increased competition for available cocoa stocks and driving prices higher.
These factors collectively have led to cocoa futures trading at elevated levels, reflecting the market's response to the current supply-demand dynamics. As of November 16, 2024, cocoa futures have experienced a substantial increase year-to-date (YTD). According to Trading Economics, cocoa futures surged beyond $7,800 per tonne, marking their highest level since mid-October. This represents a YTD increase of approximately 112.62%
US Investor Sentiment
As the year enters its final stretch, markets are approaching a historically strong seasonal period. November and December have often been positive months, particularly in election years. However, the strong post-election rally may have already pulled forward some of these gains.
Despite short-term volatility, the fundamentals underpinning the bull market remain intact. Economic growth, though expected to moderate, is still above trend. Inflation, while uneven, continues to trend downward. These factors, combined with the absence of significant external shocks, suggest that markets are well-positioned to weather periods of uncertainty.
Insider Trading
Insider trading occurs when a company’s leaders or major shareholders trade stock based on non-public information. Tracking these trades can reveal insider expectations about the company’s future. For example, large purchases before an earnings report or drug trial results might indicate confidence in upcoming good news.
%Bull-Bear Spread
The %Bull-Bear Spread chart is a sentiment indicator that shows the difference between the percentage of bullish and bearish investors, often derived from surveys or sentiment data, such as the AAII (American Association of Individual Investors) sentiment survey. This spread tells investors about the prevailing mood in the market and can provide insights into market extremes and potential turning points.
Bullish or Bearish Sentiment:
When the spread is positive, it means more investors are bullish than bearish, indicating optimism about the market’s direction.
A negative spread indicates more bearish sentiment, meaning more investors expect the market to decline.
Contrarian Indicator:
The %Bull-Bear Spread is often used as a contrarian indicator. For example, extremely high levels of bullish sentiment might suggest that the market is overly optimistic and could be due for a correction.
Similarly, when bearish sentiment is extremely high, it might indicate that the market is overly pessimistic, and a rally could be on the horizon.
Market Extremes and Reversals:
Historically, extreme values of the spread (both positive and negative) can signal turning points in the market. A very high positive spread can signal market exuberance, while a very low or negative spread may indicate fear or capitulation.
NAAIM Exposure Index
The NAAIM Exposure Index (National Association of Active Investment Managers Exposure Index) measures the average exposure to U.S. equity markets as reported by its member firms. These are typically active money managers who provide their equity exposure levels weekly. The index offers insight into how much these managers are investing in equities at any given time, ranging from being fully short (-100%) to leveraged long (up to +200%).
AAII Investor Sentiment Survey
The AAII Investor Sentiment Survey is a weekly survey conducted by the American Association of Individual Investors (AAII) to gauge the mood of individual investors regarding the direction of the stock market over the next six months. It provides insights into whether investors are feeling bullish (expecting the market to rise), bearish (expecting the market to fall), or neutral (expecting the market to stay about the same).
Key Points:
Bullish Sentiment: Reflects the percentage of investors who believe the stock market will rise in the next six months.
Bearish Sentiment: Represents those who expect a decline.
Neutral Sentiment: Reflects investors who anticipate little to no market movement.
The survey is widely followed as a contrarian indicator, meaning that extreme levels of bullishness or bearishness can sometimes signal market turning points. For example, when a large number of investors are overly optimistic (high bullish sentiment), it could suggest a market top, while excessive pessimism (high bearish sentiment) may indicate a market bottom is near.
SPX Put/Call Ratio
The SPX Put/Call Ratio is an indicator that is used to gauge market sentiment. This is calculated as the ratio between trading S&P 500 put options and S&P call options. A high put/call ratio can indicate fear in the markets, while a low ratio indicates confidence. For example, in 2015, the Put-Call ratio was as high as 3.77 because of market fears stemming from various global economic issues like a GDP growth slowdown in China and a Greek debt default.
CBOE Equity Put/Call Ratio
The CBOE (Chicago Board Options Exchange) equity put/call ratio is a sentiment indicator used by traders and analysts to gauge market sentiment and potential shifts in investor behavior. It is calculated by dividing the volume of put options by the volume of call options on equities. Here’s what it reveals and how it is generally interpreted:
High Put/Call Ratio: When the put/call ratio is high (above 1.0), it suggests that there is more demand for put options than call options. This typically reflects a more bearish sentiment, as investors may be hedging against potential declines or expecting the market to fall.
Low Put/Call Ratio: Conversely, a low put/call ratio (below 0.7) indicates a higher volume of call options compared to puts, reflecting bullish sentiment. Investors may be expecting upward momentum and are positioning themselves to profit from price gains.
ISEE Sentiment Index
The ISEE (International Securities Exchange Sentiment) Index is a measure of investor sentiment derived from options trading. Unlike traditional put/call ratios, the ISEE Index focuses only on opening long customer transactions and is adjusted to remove market-maker and firm trades, providing a purer sentiment reading.
The ISEE Index typically ranges from 0 to 200, with readings above 100 indicating more call options being bought relative to put options, suggesting bullish sentiment. Conversely, readings below 100 suggest bearish sentiment, with more puts being purchased relative to calls.
New Highs - New Lows
The New Highs - New Lows indicator (NH-NL) displays the daily difference between the number of stocks reaching new 52-week highs and the number of stocks reaching new 52-week lows. The NH-NL indicator generally reaches its extreme lows slightly before a major market bottom. As the market then turns up from the major bottom, the indicator jumps up rapidly. During this period, many new stocks are making new highs because it's easy to make a new high when prices have been depressed for a long time. The NH-NL indicator oscillates around zero. If the indicator is positive, the bulls are in control. If it is negative, the bears are in control. As the cycle matures, a divergence often occurs as fewer and fewer stocks are making new highs (the indicator falls), yet the market indices continue to reach new highs. This is a classic bearish divergence that indicates that the current upward trend is weak and may reverse.
ARMS Index
The Arms Index, also known as the TRIN (Short-Term TRading INdex), was developed by Richard Arms in the 1960s. It is calculated by dividing the ratio of advancing stocks to declining stocks by the ratio of advancing volume to declining volume. Interpreting the Arms Index involves looking at its value in relation to certain thresholds. A value below "1" is considered bullish, indicating that advancing stocks and volume dominate the market. Conversely, a value above "1" is considered bearish, suggesting that declining stocks and volume are more prevalent. Extremely low values (below 0.5) or high values (above 2) are often seen as potential reversal signals.
CME Fedwatch
What is the likelihood that the Fed will change the Federal target rate at upcoming FOMC meetings, according to interest rate traders? Use CME FedWatch to track the probabilities of changes to the Fed rate, as implied by 30-Day Fed Funds futures prices.
CNN Fear & Greed Constituent Data Points & Composite Index
Final Composite Fear & Greed Index Reading
Institutional S/R Levels for Major Indices
When you’re a large institutional player, your primary goal is to find liquidity - places to do a ton of business with the least amount of slippage possible. VolumeLeaders.com automatically identifies and visually plots the exact spots where institutions are doing business and where they are likely to return for more. It’s one of the primary reasons “support” and “resistance” concepts work and truly one of the reasons “price has memory”.
Levels from the VolumeLeaders.com platform can help you formulate trades theses about:
Where to add or take profit
Where to de-risk or hedge
What strikes to target for options
Where to expect support or resistance
And this is just a small sample; there are countless ways to leverage this information into trades that express your views on the market. The platform covers thousands of tickers on multiple timeframes to accommodate all types of traders. Observe for yourself how accurate the levels are by marking-up your charts with the information in the “Trade Levels” boxes and play-along in real-time this week.
SPY 0.04%↑
Largest Trades (Blue Circles)
Mid to Late October ($577 - $584): Notable trades occurred in this range, with high relative sizes (RS) up to 139.43% on Oct 29 at $580.93. This suggests significant institutional accumulation, making this area a support zone for SPY.
Early November ($589 - $593): Large trades occurred on Nov 6 at $591.04 with an RS of 119.11%, showing strong buying interest, but the price has since pulled back. This level now likely serves as resistance.
Key Institutional Activity Price Levels (Dashed Blue Lines)
Support Levels
$569.60: This level is a critical support zone, backed by the largest cumulative trade activity of $9.83B with an RS of 2.13x. Institutional buyers are likely to step in at this level if the price continues to decline.
$577 - $580: Another key support range based on multiple large trades and cumulative volume in late October.
Resistance Levels
$593.50: This level saw significant institutional activity on Nov 6, suggesting that it may act as a key resistance level for SPY in the near term.
Volume and Relative Size (RS)
Largest Trade on Oct 29 at $580.93: This trade with an RS of 139.43% highlights a significant area of institutional activity, making $580.93 an important support level.
High Volume at $593.50: The large trade cluster at this level with RS values above 100% suggests strong selling pressure, turning this area into a resistance zone.
Support & Resistance Levels
Support Levels
$569.60 - $570.00: This level remains the strongest support zone due to the large cumulative trade activity.
$577 - $580: This range represents a secondary support level, with strong institutional accumulation evident in October trades.
Resistance Levels
$593.50: This level is the key resistance based on heavy institutional selling in early November.
$589 - $590: Intermediate resistance exists at this level, with institutional trades showing some distribution.
Conclusion
Bearish Short-Term Bias: SPY has pulled back from the $593.50 resistance level and is currently testing lower levels. The immediate support at $577 - $580 will be critical for maintaining the uptrend; a break below this could result in further declines toward $569.60.
Key Levels to Watch:
Support: $569.60, $577, $580.
Resistance: $589, $593.50.
QQQ -0.01%↓
Largest Trades (Blue Circles)
Significant Trades in Early November ($504 Range):
The largest trade occurred on Nov 6 at $504.22 with an RS of 133.65%, indicating heavy institutional selling or distribution at this level. This is likely a key resistance level.
Another trade on Nov 6 at $497.25 with an RS of 132.74% further suggests distribution around this price range.
Support Trades in the $485 - $487 Range (Late October):
Notable trades occurred at $488.36 (RS 68.83%) and $487.60, indicating institutional buying in this zone, which could act as a support level.
Key Institutional Activity Price Levels (Dashed Blue Lines)
Support Levels
$485.10 - $487.60: This range, with cumulative institutional interest of $5.35B to $2.74B, is likely a strong support zone in the event of continued downside.
Resistance Levels
$496.40: This level, with a cumulative trade size of $4.13B and an RS of 3.24x, is likely to serve as a key resistance level if QQQ attempts to rebound.
$504.22: The largest trade in early November suggests this is a significant resistance level.
Volume and Relative Size (RS)
Largest Trade on Nov 6 at $504.22: The high RS of 133.65% reflects substantial selling activity, turning $504.22 into a key resistance level.
Consistent Large Trades Between $485 - $487: Institutional activity in this range reinforces it as a critical support zone.
Support & Resistance Levels
Support Levels
$485.10 - $487.60: This area shows strong institutional buying interest and should act as a solid support zone.
$496.40: While currently acting as resistance, it could provide intermediate support on further pullbacks.
Resistance Levels
$496.40 - $504.22: This range represents strong institutional selling, with $504.22 serving as the upper resistance limit.
$508 - $512: If QQQ recovers, this range will serve as the next resistance zone.
Conclusion
Bearish Momentum with Support in Play: QQQ has declined from the $504.22 resistance level and is now approaching the critical support zone of $485 - $487. If this support holds, QQQ could stabilize or attempt a rebound. However, a break below this range could lead to further downside.
Key Levels to Watch
Support: $485.10 - $487.60, $496.40 (secondary).
Resistance: $496.40, $504.22, and $508-$512.
IWM 0.00%↑
Largest Trades (Highlighted Circles)
Significant Trades Around $237 (Nov 6):
The largest trade occurred on Nov 6 at $237.22 with a relative size (RS) of 34.54%, suggesting heavy institutional activity at this level. Given the subsequent decline, this level is likely acting as a resistance zone.
Support Trades Around $220 - $225 (Late October):
Large trades took place in the $220 - $225 range, with RS values reaching up to 31.58% on Oct 25 at $219.40. This area has historically shown institutional accumulation, likely acting as a support zone.
Key Institutional Activity Price Levels (Dashed Blue Lines)
Support Levels:
$222.50: With a total trade volume of $6.03B and RS of 2.73x, this level is a strong support zone where institutional buyers are likely to step in.
$220.40 - $221.70: This range shows consistent institutional activity and is an additional support level for IWM.
Resistance Levels:
$237.22: The largest trade in early November marks this level as a critical resistance zone due to significant institutional selling activity.
Volume and Relative Size (RS)
Largest Trade on Nov 6 at $237.22: This trade with an RS of 34.54% reflects substantial institutional selling, establishing this level as key resistance.
Consistent Large Trades in the $220 - $225 Range: High RS values in this zone confirm it as a solid support range, where institutions have shown interest in accumulating shares.
Support & Resistance Levels
Support Levels
$222.50: Strong support based on significant institutional buying activity.
$220.40 - $221.70: Additional support range where consistent large trades were executed.
$224.10: A key level with $5.09B traded, adding intermediate support within the broader range.
Resistance Levels
$237.22: This level marks a key resistance zone given the large institutional trades and subsequent decline in price.
$231.80: An intermediate resistance level where significant activity was observed.
Conclusion
Bearish Momentum with Strong Support Zones: IWM has seen a decline from the $237.22 resistance level, with key support between $220 - $225. The price is currently testing lower levels, and institutional activity in this support range could stabilize the decline.
Key Levels to Watch
Support: $222.50, $220.40 - $221.70, and $224.10.
Resistance: $231.80 and $237.22.
DIA 0.00%↑
Largest Trades (Orange Circles)
Significant Trades Around $437 - $434 (Nov 7):
Notable trade occurred on Nov 7 at $437.39 with an RS of 15.54%, suggesting substantial institutional activity near this level. This indicates resistance, as the price has declined since.
Another significant trade on Nov 15 at $434.50 with an RS of 9.43% highlights potential support in the current price zone.
Support Trades in the $417 - $421 Range (Late October):
Substantial institutional activity in the $417 - $421 range, particularly the Oct 31 trade at $417.67 with an RS of 30.76%, reinforces this as a strong support zone.
Key Institutional Activity Price Levels (Dashed Blue Lines)
Support Levels
$417.70: This level has cumulative trade volume of $423M and an RS of 2.18x, marking it as a strong support zone.
$420.50 - $421.80: Additional support zone with significant institutional activity, likely to provide a floor for further declines.
Resistance Levels
$429.30: With a total trade value of $268M, this level is a key resistance zone where institutional selling has occurred.
$437.39: The largest recent trade suggests this level will act as short-term resistance if DIA attempts to rebound.
Volume and Relative Size (RS)
Largest Trade on Oct 31 at $417.67: This trade with an RS of 30.76% highlights significant institutional interest, reinforcing $417.70 as critical support.
Recent Trades Around $434.50: These trades suggest potential buying interest in the current price zone, providing intermediate support.
Support and Resistance Levels
Support Levels
$417.70 - $421.80: This range has shown consistent institutional buying activity and is the primary support zone.
$434.50: With recent trades at this level, it could provide intermediate support in the current downtrend.
Resistance Levels
$429.30: This level remains a key resistance zone due to institutional selling activity.
$437.39: Likely to act as strong short-term resistance following recent institutional distribution.
Conclusion
Bearish Momentum with Strong Support Zones: DIA has declined from the $437.39 resistance level and is now approaching critical support between $417 - $421. If this support holds, DIA could stabilize; a break below it, however, would signal further downside.
Key Levels to Watch:
Support: $417.70 - $421.80, $434.50.
Resistance: $429.30, $437.39.
Institutional Order Flow
Rolling 1-Yr Dollars By Day
This chart shows institutional activity by dollars on a rolling 1-year basis. A log scale is used to dampen the outsized-effects of OpEx-days and to help highlight more nuanced activity at the lows.
Last Week’s Institutional Activity By Sector
This is an incredibly important chart to watch as it contains lots of nuanced suggestions at a thematic level. Watch this chart closely week-to-week to stay informed about where institutional money is flowing, adjust your strategies based on momentum, align your portfolio with macroeconomic and market trends, and manage risks more effectively by avoiding sectors losing institutional favor. The Top 10 active sectors are identified and the rest grouped as “Other”.
Sector Rotation Insights: The chart highlights which sectors are attracting institutional activity and which are losing favor. Institutions often lead market trends, so tracking shifts in their focus can indicate sector rotations.
Sentiment Analysis: The level of institutional activity reflects confidence in specific sectors. Rising activity in traditionally defensive sectors (e.g., healthcare, utilities) may indicate caution, while a surge in growth sectors (e.g., technology, consumer discretionary) could suggest optimism.
Emerging Trends: Sudden spikes in a previously overlooked sector, like industrials or consumer staples, might hint at emerging opportunities or structural shifts.
Macro Themes: Changes in sector activity often align with broader macroeconomic themes like inflation, interest rates, or geopolitical events. For instance:
Increased activity in energy might indicate concerns about oil supply or rising prices.
Growth in technology could align with innovations or favorable policies.
Risk Management: Declining institutional activity in a sector might signal weakening fundamentals or heightened risks.
Spotting Overcrowding: Excessive activity in a single sector over multiple weeks may suggest overcrowding, which could lead to heightened volatility if institutions begin to exit.
Top Institutional Orderflow
Many excellent trade ideas and sources of inspiration can be found in these prints. While only the top 30 from each group are displayed, the complete results are accessible in VolumeLeaders.com for you to explore at your convenience any time. Remember to configure trade alerts within the platform to ensure you never overlook institutional order flows that capture your interest or are significant to you. The blue charts encompass all types of trades, including blocks on lit exchanges; the purple charts exclusively depict dark pool trades; and the green charts represent sweeps only.
Top Aggregate Dollars Transacted by Ticker
Largest Individual Trades by Dollars Transacted
Top Aggregate Dark Pool Activity by Ticker
Largest Individual Dark Pool Blocks by Dollars
Top Aggregate Sweeps by Ticker
Top Individual Sweeps by Dollars Transacted
Last Week’s Institutionally-Backed Gainers & Losers
If you’re going to bet on a name, consider one that is officially endorsed by an institution! These are the top percent gainers (green) and percent losers (red) from this week’s open-to-close that had a trade price greater than $20 and institutional involvement. Continue watching tickers from this and prior stacks as these names frequently turn into multi-leg trades with a lot of movement!
Top Institutionally Backed Gainers
Top Institutionally Backed Losers
Last Week’s Billion-Dollar Prints
Tickers that printed a trade worth at least $1B last week get a special shout-out… Welcome to the club. Subs should login to VolumeLeaders.com to get the exact trade price and relevant institutional levels around the trade - these are massive commitments by institutions that should not be ignored.
Investments In Focus: Bull vs Bear Arguments
Please read “Institutional S/R Levels For Major Indices” at the top of this stack to understand the nature and importance of what we’re looking at here visually. Institutions leave footprints that VolumeLeaders.com can illustrate for you while providing context to assess things like institutional conviction and urgency. Theses and data given below are not financial advice, just personal observations that may be wrong; consult a certified financial advisor before making any investment decisions.
APP -0.44%↓
Bull Thesis for AppLovin Corporation (APP):
Exceptional Stock Performance: AppLovin's stock has surged over 600% year-to-date, reflecting strong investor confidence and robust financial health.
Inclusion in Nasdaq-100 Index: Effective November 18, 2024, AppLovin will join the Nasdaq-100 index, replacing Dollar Tree. This inclusion is a testament to the company's significant market capitalization and growth trajectory.
Strong Financial Performance: In Q3 2024, AppLovin reported earnings of $1.25 per share on $1.2 billion in sales, marking a 317% increase in earnings and a 39% rise in sales year-over-year. The company also provided positive guidance for the current fourth quarter.
AI-Driven Advertising Platform: The company's AI-powered advertising recommendation engine, AXON, has been a key driver of growth, enhancing monetization and marketing capabilities for mobile games.
Expansion into E-commerce: AppLovin is testing ad solutions for mobile gamers that could attract both local and national businesses, indicating a strategic move into the e-commerce sector.
Bear Thesis for AppLovin Corporation (APP):
Valuation Concerns: Despite impressive stock performance, some analysts advise cautious optimism due to the company's premium valuation and the ongoing challenge of scaling its platform beyond gaming.
Market Volatility: AppLovin's stock experienced a 5% drop on Monday morning following the announcement of its inclusion in the Nasdaq-100, indicating potential volatility and profit-taking by investors.
Dependence on Gaming Sector: A significant portion of AppLovin's revenue is derived from the gaming industry. Any downturn in the gaming sector could adversely affect the company's financial performance.
Competitive Landscape: The mobile advertising and app monetization markets are highly competitive, with numerous players vying for market share. Increased competition could pressure AppLovin's margins and growth prospects.
Regulatory Risks: As a global company operating in various markets, AppLovin is subject to regulatory risks, including data privacy laws and advertising regulations, which could impact its operations and profitability.
DLTR 0.00%↑
Bull Thesis for Dollar Tree Inc. (DLTR):
Resilient Business Model: Dollar Tree operates a vast network of discount retail stores, appealing to cost-conscious consumers, especially during economic downturns. This model provides a stable revenue base.
Strategic Leadership Changes: The appointment of Michael Creedon as interim CEO, following Rick Dreiling's resignation due to health reasons, brings fresh leadership. Creedon's experience could drive strategic initiatives and operational improvements.
Positive Market Reaction: Following the leadership change and reaffirmation of third-quarter outlook, Dollar Tree's shares rose by 5.2%, indicating investor confidence in the company's direction.
Analyst Support: Truist Financial maintained a 'Buy' rating on Dollar Tree, reflecting confidence in the company's prospects.
Strategic Review of Family Dollar: Dollar Tree is progressing in its strategic review of the Family Dollar brand, exploring options like a sale or spin-off, which could unlock shareholder value.
Bear Thesis for Dollar Tree Inc. (DLTR):
Stock Performance Decline: Dollar Tree's stock has fallen 53% this year, pressured by weaker demand from lower-income customers and a focus on discretionary items over essentials.
Removal from Nasdaq-100 Index: AppLovin will replace Dollar Tree in the Nasdaq-100 index before the market opens on November 18, 2024, which may impact investor perception and fund allocations.
Analyst Downgrades: KeyBanc Capital Markets downgraded Dollar Tree to 'Sector Weight,' and Telsey Advisory Group reduced the stock from 'Outperform' to 'Market Perform,' setting a price target of $75.
Operational Challenges: The company faces increased competition and potential political changes, which could impact its market position and profitability.
Leadership Transition Risks: The sudden resignation of CEO Rick Dreiling introduces uncertainty during a critical period, potentially affecting strategic initiatives and company stability.
SILV 0.00%↑
Bull Thesis for SilverCrest Metals Inc. (SILV):
Record Financial Performance: In Q3 2024, SilverCrest reported revenues of $80 million, marking a significant increase from previous quarters. This growth reflects the company's strong operational efficiency and favorable market conditions.
High-Grade Las Chispas Mine: The Las Chispas mine in Mexico has demonstrated excellent margins and impressive cash flows since production began. Its high-grade ore contributes to lower production costs and higher profitability.
Strategic Acquisition by Coeur Mining: Coeur Mining's acquisition offer for SilverCrest, valued at $1.7 billion, underscores the company's value and potential. The transaction is expected to close in late Q1 2025, potentially providing shareholders with a premium on their investments.
Strong Liquidity Position: As of Q3 2024, SilverCrest holds $158 million in cash and bullion, providing financial flexibility for future projects and operational stability.
Positive Market Sentiment: Analysts have expressed optimism about SilverCrest's prospects, citing its strong operating performance and consistent cash flow as factors contributing to a robust share price.
Bear Thesis for SilverCrest Metals Inc. (SILV):
Dependence on Single Asset: SilverCrest's primary revenue source is the Las Chispas mine. Any operational disruptions or unforeseen issues at this site could significantly impact the company's financial performance.
Commodity Price Volatility: Fluctuations in silver and gold prices can directly affect profitability. A decline in precious metal prices could reduce revenue and margins.
Regulatory and Political Risks: Operating in Mexico exposes SilverCrest to potential regulatory changes and political instability, which could affect mining operations and profitability.
Integration Risks Post-Acquisition: The upcoming acquisition by Coeur Mining may present integration challenges, including potential cultural clashes and operational disruptions, which could affect performance.
Market Competition: The mining industry is highly competitive, with numerous companies vying for resources and market share. Increased competition could pressure SilverCrest's margins and growth prospects.
JGRO 0.00%↑
Experienced Management Team: JGRO benefits from the expertise of seasoned portfolio managers, including Giri Devulapally and Felise Agranoff, who have extensive experience in growth investing.
Strong Performance Since Inception: Since its launch in August 2022, JGRO has delivered impressive returns, outperforming the Russell 1000 Growth Index with a 17.6% annualized gain through January 2024.
Diversified Portfolio: The ETF holds a well-diversified portfolio of approximately 100 stocks, reducing company-specific risk and providing exposure to a broad range of growth opportunities.
Active Management Approach: JGRO combines two compelling growth strategies into a single ETF, leveraging active management to identify underappreciated growth opportunities and adapt to market conditions.
Competitive Expense Ratio: With an expense ratio of 0.44%, JGRO offers a cost-effective option for investors seeking active management in the large-cap growth space.
Bear Thesis for JPMorgan Active Growth ETF (JGRO):
Market Volatility Exposure: As a growth-focused ETF, JGRO may be more susceptible to market volatility, particularly during periods of economic uncertainty or downturns.
Concentration in Top Holdings: Approximately 49% of the ETF's assets are concentrated in its top 10 holdings, which may increase exposure to individual company risks.
Biweekly Rebalancing Limitations: The ETF's biweekly trading and rebalancing schedule might face slight disadvantages in timing trades around price momentum compared to mutual funds without such restrictions.
Potential Underperformance in Value Markets: In market environments where value stocks outperform growth stocks, JGRO's growth-oriented strategy may lead to relative underperformance.
Active Management Risks: While active management can provide opportunities for outperformance, it also carries the risk of underperforming the benchmark due to manager decisions or market conditions.
FCX 0.00%↑
Bull Thesis for Freeport-McMoRan Inc. (FCX):
Strong Financial Performance: In Q3 2024, Freeport-McMoRan reported revenues of $6.79 billion, a 17% increase from the same period in 2023, indicating robust demand for its products.
Strategic Analyst Upgrades: Analysts have shown confidence in FCX, with UBS upgrading the stock to 'Buy' with a price target of $55, and Morgan Stanley setting a target of $62, reflecting positive expectations for future performance.
Operational Efficiency: The company maintains an operating margin of 27.18% and a profit margin of 7.92%, demonstrating effective cost management and profitability.
Diversified Asset Portfolio: Freeport-McMoRan's assets include significant reserves of copper, gold, and molybdenum across North America, South America, and Indonesia, providing a diversified revenue base.
Positive Market Sentiment: The stock is trading 26.03% above its 52-week low, indicating investor confidence and potential for further appreciation.
Bear Thesis for Freeport-McMoRan Inc. (FCX):
Stock Volatility: FCX has experienced fluctuations, with a 10.93% decline over the last five trading days and a 9.80% drop over the past 30 days, reflecting potential instability.
Analyst Downgrades: Scotiabank downgraded FCX to 'Sector Perform' on September 30, 2024, suggesting concerns about the company's near-term prospects.
Insider Selling: Notable insider transactions include the sale of 13,000 shares by EVP & CFO Maree E. Robertson on November 11, 2024, which may indicate a lack of confidence among management.
Commodity Price Dependence: As a mining company, Freeport-McMoRan's financial performance is closely tied to commodity prices, which can be volatile and subject to global economic conditions.
Operational Risks: The company faces potential challenges such as geopolitical risks in operating regions, regulatory changes, and environmental concerns that could impact operations and profitability.
Summary Of Thematic Performance YTD
VolumeLeaders.com provides a lot of pre-built filters for thematics so that you can quickly dive into specific areas of the market. These performance overviews are provided here only for inspiration. Consider targeting leaders and/or laggards in the best and worst sectors, for example.
S&P By Sector
S&P By Industry
Commodities: Energy
Commodities: Metals
Commodities: Agriculture
Country ETFs
Currencies
Global Yields
Factors: Size vs Value
Factors: Style
Factors: Qualitative
Social Media Favs
Analyzing social sentiment can provide valuable insights for investment strategies by offering a pulse on public perception, mood, and market sentiment that traditional financial indicators might not capture. Here’s how social sentiment analysis can enhance investment decisions:
Market Momentum: Positive or negative social sentiment can signal impending momentum shifts. When public opinion on a stock, sector, or asset class changes sharply, it can create buying or selling pressure, especially if that sentiment becomes widespread.
Early Detection of Trends: Social sentiment data can help investors spot trends before they show up in technical or fundamental data. For example, increased positive chatter around a particular company or sector might indicate growing interest or excitement, which could lead to price appreciation.
Gauge Retail Investor Impact: With the rise of retail investor platforms, collective sentiment on social media can lead to significant price movements (e.g., meme stocks). Understanding how retail investors view certain stocks can help in identifying high-volatility opportunities.
Event Reaction Monitoring: Social sentiment can provide real-time reactions to news events, product releases, or earnings reports. Investors can use this information to gauge market reaction quickly and adjust their strategies accordingly.
Complementing Quantitative Models: By adding a social sentiment layer to quantitative models, investors can enhance predictions. For example, a model that tracks historical price and volume data might perform even better when factoring in sentiment trends as a measure of market psychology.
Risk Management: Negative sentiment spikes can be a signal of potential downturns or increased volatility. By monitoring sentiment, investors might avoid or hedge against investments in companies experiencing a public relations crisis or facing negative perceptions.
Long-Term Sentiment Trends: Sustained sentiment trends, whether positive or negative, often mirror longer-term market cycles. Tracking sentiment trends over time can help identify shifts in investor psychology that could affect longer-term investments or sector rotations.
For these reasons, sentiment analysis, when combined with other tools, can provide a comprehensive view of both immediate market reactions and underlying investor attitudes, helping investors position themselves strategically across various time frames. Here are the most mentioned/discussed tickers on Reddit from some of the most active Subreddits for trading:
Events On Deck This Week
Here are key events happening this week that have the potential to cause outsized moves in the market or heightened short-term volatility.
Econ Events By Day of Week
Anticipated Earnings By Day of Week
Thank you for being part of our community and for taking the time to read this publication. Your engagement and insights mean a great deal to all of us, and we're genuinely grateful to share this space with such dedicated and thoughtful readers. Wishing you a productive and successful week ahead in the markets. May the coming days bring clarity and great opportunities. Happy trading!
