The market finished the week higher, even as there were more declining sectors than advancers. The outsized performance of growth sectors last week saved the market, but also masked deterioration that can’t be ignored. Amazon (AMZN) set the pace, although First Solar Inc. (FSLR) was the top mover on the session. I see numerous bottom fishing efforts among the top ten movers as a sign that savvy investors are slowly repositioning.

By Hook or By Crook

The S&P 500 (SPX) remains above its 50-day moving average, even as the number of advancing names plunged. The relative strength index (RSI) is weakening, and the rate of change (ROC) is turning lower; however, Friday saw breadth improve to 52.6% advancers.

Board Factors

Small-cap quality took a significant hit, which is surprising given the notion that rates are expected to begin declining and small-cap earnings are poised to surge. We are closely monitoring individual small-cap names and feel confident about getting in ahead of the crowd.

Powell’s Speed Bump

Fed Jay Powell really threw a monkey wrench in the rally, which was on cruise control partly due to the notion that the Fed would be friendly and accommodative. Now, there is speculation that members of the Fed aren’t even being friendly with each other, and this could lead to a slew of issues, including:

• Policy paralysis
• Miscommunication

The S&P 5000 finished the week higher, but barely, and it feels more like an uphill battle than it did before 2:30 p.m. last Wednesday. The good news is this is not the stuff of an irrationally arrogant or exuberant market.

November Rocks!

Using history as a guide, the stock market could be on the verge of taking off and not looking back for the next six months.

Today’s Session

There is a lot of news in the energy space, with the AI story remaining the dominant theme in the market and economy.

Although this has been a remarkable rally, several signs indicate that the market will enter the first trading day of November as a coiled spring.

The monster rally from May through October (every month higher) has occurred three times before, and each was followed by a strong year-end rally, with a median gain of 6.5% compared to 3.6% in other years.

The realized average stock correlation suggests a monster move as well.

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