Day Four Higher
Veteran's Day Market Update
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A sincere Thank You to all who have served and are serving. Without you, none of this matters.
The Markets
The major indexes went for 3 of 4 on positive action today as the post-election rally continues. Only QQQ finished in the red, closing down a whopping (/sarcasm) -0.04%. But as we look at the completion of day four higher, are there signs that this move could slow down?
We’ll let the charts do the talking.
But first — This morning, I had the pleasure of joining JC Parets, Steve Strazza, and Spencer Israel on the Stock Market TV Morning Show. The Allstar Charts crew is doing amazing work on this channel, and the show has already logged an impressive roster of traders and analysts. It truly was a pleasure to join the list.
We had a great conversation about what we see and potentially what to do as the markets run higher. This short clip has way more info and ideas than I could ever fit into the page here. Please take a few minutes to check it out here:
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The Charts
SPY was higher for a fourth day since the election, though it did drift lower all day after the open. The volume was a bit lighter than average, and the RSI is flattening out just under 70. With the 8-day MA nearly catching up to the breakout pivot at $585.91, that could become a good support level.
QQQ, as mentioned above, actually closed slightly red for the day with a pattern very similar to SPY. However, RSI is 67, and the 8-day MA hasn’t reached the breakout pivot level of $503.52.
IWM was a leader again, gapping sharply higher while sending the RSI up and over 75. With the 8-day MA well above the previous pivot at $226.69, we can watch the post-election gap pivot low of $232.75 as the first potential support level.
This small-cap index drifted mostly sideways all day, staying above the daily VWAP.
DIA gapped higher and managed to keep some gains, closing up 0.66% and above the morning’s opening prices. But a potential reversal candle has taken shape, leaving a long shadow overhead. We’ll see if tomorrow’s action confirms or negates the pattern.
TLT has even been in on the rally these last several days, though it is finding resistance at the declining 21-day MA. Today’s price action may have less meaning, though, since the bond market was closed. Notice the very light volume.
DXY The Dollar keeps rising, but it hasn’t provided the customary headwind for stocks. Maybe it will matter again someday. For now, it isn’t a factor.
BTCUSD Wow! What else can we say? Bitcoin is up more than 30% since the day before we took to the polls. RSI is nearly 84. The price is more than 15% above the 8-day MA. And look at the volume! It will be very interesting to see how this degree of extension gets resolved.
The Trade
It’s hard to chase. And the higher prices go, the more everyone wants to buy.
The stock indexes may cool off a bit. Cryptocurrencies don’t yet show any signs of doing so.
The options:
Be patient and wait for prices to correct, either by time and sideways consolidation or by declining.
Or buy small, starter-size positions with the expectation of adding more once better setups arrive.
More ideas and potential setups will be sent to supporting subscribers as the week progresses.
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The Disclosures
***This is NOT financial advice. This is NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.