Thanksgiving Melt-Up For SPX, Seasonals Say More Ahead. Are They Right? Nov 21st Plan
Todays price action was another win for technical analysis 101 - if one can tune out the noise (and there is an extreme amount of it out there) and focus purely on what the technicals are showing, the results are profound. On Tuesday after CPI, we broke out a 4 month downtrend channel, and ES put in a monster 120 point rally. From last Wednesday until today, ES has spent in basing largely 4507-4535. This base formed a textbook, bullish triangle pattern late last week. Today, it went into lift-off.
I concluded my last newsletter by writing the following: “ES has spent three days resting now, forming a triangle with 4535 resistance and 4514-07 support. My general lean is always to defer to the trend until proven otherwise, as long as 4514-07 keeps hold, we push higher to 4543, 4556-58+”. This is precisely what we saw today, with ES breaking out the triangle and running to 4543 1st target, then onwards to 4556+. We closed just above today.
We are now 20 days into November, and have only put in 1 red day the entire month. It is now thanksgiving week though, which is seasonally quite strong (The Wed-Fri period of thanksgiving week has been green 82% of years since 1950). How much more upside is left? In today’s newsletter, I’ll talk this, breakdown the setup that triggered this recent leg up (one of my favorites), then talk the plan for tomorrow.