Will Thanksgiving Bring A New All Time High For SPX? Nov 28/29 Plan
This last 1.5 weeks has been a testament to how effective simple technical analysis can be to get - and keep - us on the right side of the market. There is more market related information out there than at any point in history. Only price can cut through the noise and tell us what institutions are doing in real time, so we can follow. What were they they doing from last Monday-Wednesday? Accumulating in a base at the 5886 level, which got us long. This printed on the price chart as a clear bull flag which had formed off the November highs and had resistance 100 points higher at 5988.
What do bull flags typically do? They fill out to resistance, then breakout, and that is exactly what we saw into this week. It is why I wrote last Wednesday at 3pm: “As long as that level[5886] continues to defend….we can work up higher to 5988-93 which is resistance of the bull flag structure that we have built since the election week highs”. By Friday’s close, we had ran 100 points to tag 5988-93 bull flag resistance. Then, to start this week, we broke out the flag and saw an explosive leg higher to 6038-44, which has been resistance all week so far as we build out a new range to setup the next trend leg.
I wrote yesterday at 4pm: “My general lean is to defer to the trend and we are closing today right at resistance of a 2 day range which has generally been 5993 to 6038-44 now. While this can fill out more, it ultimately sets up 6054, 6072, 6105”. After hitting resistance yesterday, we began working down the range this morning, and I wrote yesterday at 4pm: “If 6026 fails, we flush back down the range again towards the 5993 magnet. 6002 is support en route and I’ll be watching for reactions there”. We sold to ~6002 this morning, before before the dip was bought again.
Ultimately, we are just basing again to setup the next move. As discussed yesterday, the Wed-Fri Thanksgiving week stretch is green 83% of years since 1950. Will this year track? In today’s newsletter I’ll talk this, I’ll discuss the setup that provided the most recent add on Monday evening for this leg up (no surprise: Its the same setup I take everyday). Finally, I’ll discuss the actionable trade plan for tomorrow.