Bulls Remain in Control Amid Short Trading Week

55 million Americans will travel this holiday

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Our View

The S&P has rallied for three straight weeks through yesterday’s close, rising 10.4% over that time. That is its largest three-week point and percentage gains since April and June 2020, respectively, when the market was rebounding from the initial shock of the spreading Covid-19 pandemic. Those latest gains put the S&P 500 up 8.34% in the month of November alone, and up more than 17.74% since the start of the year.

I understand low volume can also be a bad omen for the rally, but right now that's not the message. This is a very historically strong week and as mentioned above, the lower holiday volumes are favoring the upside and I don't think that's going to change. 

A lot of the schools are closed and people are using that time to travel. According to AAA, 55 million Americans will travel for the Thanksgiving holiday, which is up two percent from last year. A small portion of those travelers will be going by airplane. 

"Nearly 4.7 million Americans will be flying to their holiday destinations," said Ragina Ali, from AAA. 

There are definitely a lot of investors and traders in the 55 million and volume should tick lower all week. Will there be some downside raids? I think so, but I think overall the ES goes higher throughout the short holiday week. 

Our Lean — Danny’s Trade

This is Danny Riley’s personal trading plan for the day.

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MiM and Daily Recap

ES Recap

The ES traded up to 4534.50 on Globex and opened Monday's regular session at 4524.50. After the open, the ES rallied up to 4543.00 at 10:13, pulled back to 4534.00(just above the VWAP) and then rallied up to a new high at 4550.50 at 12:30. From there, the ES traded up to 4556.50 at 1:05 and then ran all the way up to a 4571.00 double top high at 3:00. 

From 9:39 am to 3:26, the ES made 10 separate higher highs with the largest pullback being just 10.5 points and the average pullback being 4 to 6 points — it was a buy fest. The ES traded 4565.75 as the 3:50 imbalance showed $716 million to buy and quickly flipped to $205 million to sell, traded 4562.25 on the 4:00 cash close and settled at 4561.25, up 34.75 points or 0.77% on the day.

In the end, the holiday has already started, more cars are on the roads in Florida and the restaurants and bars are packed. That means lower volumes, AKA “thin to win.” In terms of the ES's overall tone, the ES and NQ were firm. Volume was light at 1.149 million contracts. 

Technical Edge

  • NYSE Breadth: 70% Upside Volume 

  • Nasdaq Breadth: 73% Upside Volume 

  • Advance/Decline: 62% Advance 

    • a 90/90 NYSE breadth/Advance-Decline on Tuesday

  • VIX: ~13.50

S&P 500 — ES Futures

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Economic Calendar

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!

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