With Thanksgiving here I’ll mostly be catching up with paperwork over the rest of the week. The globex action this morning has been very interesting and profitable, but my expectations for the rest of the day aren’t high.
SPX turned in a 28th consecutive daily close above the 5 day MA, and though I’ve only been able to check this myself back to the beginning of 1962, I understand that is a new lifetime record for SPX since 1923, beating out the previous record of 27 closes above set in (cough) 1928. I’m certain that this move here is at least as much a sign of a healthy bull market as the 1928 record was, and would note that SPX doubled in value in the months after that last record was set, though there was some bearish action after that. At some point this record-breaking run will have to end, but this being Thanksgiving week might extend the run a couple more days. The 5DMA closed yesterday at 2060. SPX daily 5 DMA chart:
If this wasn’t Thanksgiving week the short term outlook would be bearish, with a broken rising megaphone and two nested double tops in play here. It remains to be seen whether bears can make any headway in this slow tape, but if they can I’m keeping an eye on the open ES gap at 2061.75 and strong support at the weekly pivot at 2055.3 ES and last Friday’s low at 2054.75 ES. As I have the SPX 60min moving average currently at 2055/6 (SPX), this is the key support area short term. SPX 5min chart:
If we see equities go higher on low volume holiday tape, and the stats for both today and Friday are bullish, then I have both the weekly and daily upper bands at 2079, and would be looking for strong resistance there. As both the pattern setup and the stats next week lean bearish I’d be seeing a hit there as a decent short entry. SPX weekly chart:
Today may well be very boring to trade as so many people are taking the day off. This might be a good day to finish early. I’ll be doing a holiday post on the US Dollar and EURUSD tomorrow, and a morning post as usual on Friday. Everyone have a great Thanksgiving! 🙂
