Tomorrow Is The Final Full Day Of Trading For SPX. What Will Holidays Bring? Nov 27 Plan
Thanksgiving week started off with a bang and its because om Sunday evening ES opened with a gap up and broke out a two week bull flag at 5988. All last week, I was looking for a run to this 5988 resistance, writing last Wednesday at 3pm: “As long as that level[5886] continues to defend….we can work up higher to 5988 which is resistance of the bull flag structure that we have built since the election week highs”. By Friday, we hit 5988, where we spent the whole day with it as resistance, before breaking out Sunday evening. This breakout put bulls firmly in control for this week, and its why I wrote yesterday: “Bulls remain in control and we broke out a 2 week bull flag at the open last night - I am letting my runners work now.”
What happens to resistances like 5988 post-breakout? They become supports, and we back-tested 5988 from above yesterday morning, then yet again yesterday evening after flushing briefly during a Tariff-related “tape bomb” that shocked the market. I wrote yesterday at 4pm: “The bull case from here is that ES can continue holding 5988-93. From here, we would continue ping ponging this new Mode 2 base from 5988-93 to 6027 or so (possible excursions to 6038), and building out structure. When ES is ready, we can tackle new ATHs which would target 6060, 6075, then 6100”. We hit 6038 by the closed today.
Tomorrow is the last day of trading before two holiday sessions. Thanksgiving week is one of the strongest weeks of the year seasonally, green 75% of election years since 1928, 60% of regular years since 1928, and 70% of all years over the most recent last 50 years. The strength is typically weighted towards the back half of the week (Wed-Fri). Its tracking so far. Will it continue? In today’s newsletter I’ll talk this, I’ll go over the setups that got me long for this recent leg as we got a good mix of my two core setups since Friday (the Failed Breakdown, and the Back-Test. You need to master both). Finally, I’ll discuss the actionable trade plan for tomorrow.