Are the lows in for stocks and bonds?

November 06, 2023
For stocks, we think the answer is yes, at least for the near to intermediate-term and possibly longer.

For bonds, we think that a major long-term cycle low may be in.  

See our 10 reasons why, below. 

After 3 months lower in the (SPX) and going into a seasonally stronger period, we do want to stay on watch for potential reversal signs and/or buy signals.

For the week: The S&P 500 was higher by 5.85% and the Nasdaq gained 6.61%. It was the best week for both indexes since November 2022.
1. A stock market low may be contingent upon a bond market low (or peak in bond yields).

2. The US Treasury announced at their Quarterly Refunding Auction (QRA) on Wednesday that they may be near the end of their capital raising cycle.

3. The jobs market is starting to soften.

4. The FOMC is likely at or near the end of their rate hiking cycle.

5. Inflation, while elevated, is trending lower.  

6. Many bond yields and the US Dollar index closed below the 50-dma. 10 and 30-year bond yields gapped lower after this week's Treasury QRA.

7. US Treasury Bond ETF (TLT) had an all-time record volume week and closed higher. 
8. Friday saw a rare Zweig Breadth Thrust in the US equity markets. (Data below used with permission of Carson Investment Research.)
9. November is seasonally the strongest month of the year for the S&P 500 index.

10. AAII Investor sentiment reached a 12-month bearish extreme. 

(Publicly posted data below):

Hope you found this information useful.