The Upcoming Week 11/2/25
The past week was a whirlwind.
I hope you’re all enjoying your weekend and had a good Halloween!
October is over and we’re now headed into the final two months of 2025… what a year it’s been so far. I’m expecting the next two months to provide plenty more opportunity, it’s personally my favorite time to be involved in the markets. Last week we had plenty of events. The first meeting between Trump and Xi in over six years, FOMC where Jerome Powell lowered rates, and big tech earnings from Google Meta, Microsoft, Apple, and Amazon.
One word we’ve heard over and over the past week weak is breadth. After seeing broad participation and rallies in various names and sectors across the market for weeks, breadth narrowed and we saw Nvidia essentially carry the Nasdaq and become the first company in history to surpass a $5T market cap. On Tuesday we had the S&P500’s worst day of breadth in the last 35 years. Since 1990, the S&P500 never had weaker participation on a day it closed positive. Out of the 500 stocks in the S&P500, 398 closed negative while the index index itself closed +0.23%.
Participation was so bad that we actually saw a “Hindenburg Omen” trigger this week. Do I put much weight into this? No, but I’ll go over it anyways. The Hindenburg Omen is a technical indicator used to signal potential stock market crashes or major corrections. It was created by Jim Miekka, a mathematician and technical analyst in the 1990s. The name references the Hindenburg airship disaster of 1937 to symbolize a catastrophic event. It sounds much scarier than it actually is, as do most of these “negative” market triggers. The indicator focuses on market breadth, specifically stocks on the NYSE making new 52 week highs and new 52 week lows. The idea is that in a stable/healthy market, most stocks move in the same direction. When many stocks are hitting highs and lows at the same time it could suggest instability in the market.
For the “omen” to trigger, a few different conditions must occur. The number of NYSE stocks making new 52 week highs and new 52-week lows must each be greater than 2.8% of the total number of stocks traded that day, the NYSE must be above it’s 50 day moving average, the McClellan Oscillator (which measures market breadth momentum) must be negative, and the number of new highs cannot be more than twice the number of new lows. How reliable is this indicator? A single Hindenburg Omen hasn’t been very notable. Past data says that one signal has only led to significant declines about 20% of the time. The indicator matters much more when there are multiple triggers within a 30 day period, this pushes odds of a signifcant decline to around 80%. Personally I’m not going to put much weight into this and I don’t think anyone should either. Why? For one, we need to see this indicator a few more times before it has any negative correlation. Second, this bull market and uptrend is much different than almost any other, AI is a once per generation tailwind.
The same week that this “omen” triggered, we saw the S&P500 enter rare air by trading above the 50 day moving average for 125 consecutive sessions, marking the longest streak since 2011. For context, the S&P500 remained above the 50 day moving average for 247 consecutive days during the dot com bull market from January 1995-January 1996 (the longest stretch in history). If we were to break this record, that would mean that the S&P500 would have to stay above the 50 day moving average until around June 2026. Let me just say I think it’s possible…
In the rest of this article I’m going to discuss the week ahead, the Trump and Xi meeting and what it means for the market, a few trade ideas that came out of it, a new emerging theme with major government backing, several names that look ready to break out, my favorite and the best monthly charts and setups, and more.