The market continued the late day session move with a gap up but not until we saw a big pullback in the overnight session. Stop running is common in the markets and we trade through it. Lately, there has been daily stop running and noise in the stock indexes, especially the Nasdaq. While melt up markets are typical and stop running markets are typical, both patterns, at the same time, on a daily basis are less typical.
The VIX plummeted today to the 13 handle but closed at 14.10. The VIX made a low of 13.88. It made a low of 13.59 on November 14 before selling off on November 15. The stock indexes are in a slow melt up mode with a pattern of small waves higher. There are many times this type of pattern ends up generating an accelerated move to new highs on intra-day charts. I'm anticipating the Nasdaq 100 could potentially hit new highs either tomorrow or Friday.
The One Million MNS 105 was down -0.15% while the 250K Portfolio was down -$300 in live trading. We are down -1.8% on the month. A single day of more favorable price action can put us up and positive on the month. We were net long and positive in early trade but the market pulled back and generated noise all day, running the lows on the day and down to yesterday's close, to fill the gap, before moving higher again. The move higher did not take out the early session highs from this morning. Overall, it was a very narrow ranging day inside of a horizontal VWAP.
The hypothetical results for the Stock Index Portfolio 18 was -$510 per E-mini and -$50.50 per Micro.
After an extreme amount of noise, we are looking for trend cycle, potentially a gap continuation day to finish the month on a strong note.
There are some bearish cycles in the stock indexes over Thanksgiving the last six years. If you go long at the close on Wednesday before Thanksgiving and exit at the Sunday night open after the market opens, there are 4 losers and 2 winners since 2018. The biggest loser occurred in 2021 with a loss of -$5,575 in this setup. We don't hold trades over the weekend and the sample size of 6 is small, so it is not a trade we would take. I was actually looking for some bullish seasonals during Thanksgiving and found more bearish price action in recent years. In 2021 the Nasdaq 100 made its two year high on Monday, November 22, 2021, three days before Thanksgiving. It took about 25 months to recover in December 2023.
While there are some similarities to 2021 and some symmetry in the charts, the strength of the market we are in now combined with the strong tendency to move higher outside of regular trading hours at night and on holidays (more than it has in the past) leads me to anticipate some potentially strong moves in the overnight session through the end of the year. Additionally, there are some strong bullish seasonals in the stock indexes after Thanksgiving.
We still keep our long/short setups in place, but I am adding two additional overnight strategies that I will send out to All Strategy Access subscribers for the One Million MNS 107.
Bitcoin has pulled back into the futures rollover. Tomorrow December cryptocurrency futures contracts will start trading while today is the last day for the November contract. There was a large short interest in bitcoin futures, potentially institutional investors offsetting or hedging cash positions. Will they roll their hedges or liquidate their net position and how will this affect the price of Bitcoin? (and the Nasdaq?) Many times institutional investors can only hold a pre-defined percentage of their portfolio in an asset class and after a mega move, some of the institutional investors will have to change their mandate or sell off some of their position in Bitcoin.
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