August 20, 2017

Thanksgiving Day Seasonality

Yes, I know. I was supposed to have a second post last night about the seasonality that surrounds Thanksgiving. I do apologize, but after shoveling the heavy snow last night all I wanted to do was sleep. So I decided to do just that – sleep.

Before I get to Turkey Day seasonality I would like to discuss the price action in the market today. The S&P continues to flirt with the 850 level as it hovered around it for the majority of the trading day. Could we preparing for a substantial move upward. Well, while many bulls would like to see that (and I do think we could witness another sharp rally before the end of the year) our indicators are firmly in an neutral state. As I stated yesterday my shortest-term overbought/oversold indicators (1-3 days) are indeed in an overbought they are certainly not near an extreme. So a continued push, especially if we are indeed witnessing a rally with conviction (when I say conviction I must point out that I am talking about a few weeks, if that).

So, couple the aforementioned state of the market with the upcoming bullish seasonality that surrounds Thanksgiving and we could indeed witness a test of the 900 on the S&P over the short-term.  The day before and after the Thanksgiving holiday have seen the market move higher by an average of 0.5% roughly 75% of the time. It is indeed the most bullish seasonal biases of the year. Will we see the historical averages repeat themselves again this year? I guess we will see soon enough.

As for our strategies I am patiently waiting for a signal. We were close to a Gap Fade trade today, but the underlying QQQQ just couldn’t push any higher at the open. Anway, as I always say opportunties are made up easier than losses.


Overbought-Oversold levels for November 25, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 54.4 (neutral)
* Dow Jones (DIA) – 56.3 (neutral)
* Russell 2000 (IWM) – 52.2 (neutral)
* NASDAQ 100 (QQQQ) – 51.3 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 40.9 (neutral)
* Consumer Discretionary (XLY) – 58.8 (neutral)
* Health Care (XLV) – 45.7 (neutral)
* Financial (XLF) – 55.1 (neutral)
* Energy (XLE) – 58.2 (neutral)
* Industrial (XLI) – 52.2 (neutral)
* Materials (XLB) – 55.5 (neutral)
* Real Estate (IYR) – 55.2 (neutral)
* Retail (RTH) – 60.6 (neutral)
* Utilities (XLU) – 61.8 (neutral)

Ultra Extremes (Insiders Page Only)

* Ultra Long (SSO) – 53.2 (neutral)
* Ultra Short (SDS) – 40.0 (neutral)

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