Today should be far more normal for me, now that the madness of Thanksgiving (yep, we did it yesterday) is over. I’m most focused on the small caps (/RTY) which have blasted higher since Friday to almost, I say again, almost capture the last “lower high”. Let’s see if we can manage to re-weaken from here.
Looking at the equity futures in general, I think we’ve got a decent case for the reflexive rally on Friday, Monday, and Tuesday having run its course. The uptrends are universally broken, and all the buying since Thursday smacks of a dead cat bounce.
This has played out in the /ES, of course. I see that the big investment banks have already trotted out their targets of 7,500 on the S&P for the end of 2026. It’s amusing how no bank can reliably predict where the market will be a few days from now, but they have no qualms about pushing out numbers thirteen months into the future.
In my estimation, we have shifted from an uptrend (which began on April 7th) to a downtrend, as I’ve tried to highlight with the /NQ futures here.
At the same time, it’s clear from the VIX that cracks are definitely appearing in the system. The powers that be want the VIX to placidly sail along in the lower teens, but from time to time they simply cannot keep the genie in the bottle, and volatility lurches into the 30s. I’ve got a feeling we’ve got a few big lurches to come just in the next nine months or so.
Slope’s theme continues to be, long term, “bullish precious/bearish equities.” Gold stopped its ceaseless ascent last month, and the decision point now is that it’s going to do with this symmetric triangle. A break in either direction would clarify where gold, silver, and platinum are likely heading for at least a few weeks further.
I am entering the day relatively light, since I got smacked around some yesterday (it’s probably a good thing I was too distracted cooking to put on more trades). I’ll see about expanding into some new bearish positions once we open. In the meanwhile, good luck with your normal Thanksgiving prep. We’ll be contenting ourselves with a fridge full of leftovers.
