Turn Down The Volume - And The Dollar?
Monday Market Update For Thanksgiving Week
Key Takeaways
Volume is light
Treasury bonds jump
Stock indexes gap higher and settle in
US dollar futures take a break, with potential to go lower
The markets are closed all day Thursday and half of Friday
I am pleased to announce the launch of reader-supported subscriptions to Trading-Adventures.com. For just $15 a month, you can further support this work and enhance your Trading Adventure.
Go deeper than the indexes to analyze market moves beneath the surface.
More charts, more analysis, and more education to improve your trading and enhance your success.
Subscribe now to support this Trading Adventure and take a significant step forward on your own. It's all available for less than a cup of coffee each week.
Been here a while and enjoy the freebies? No worries. Free subscribers will continue to receive the Market Update articles twice a week.
And you can help in other ways.
Share Trading Adventures
Forward this email to friends, family, coworkers, and fellow traders
Thank you for considering a paid subscription to Trading Adventures. I look forward to supporting you on your trading journey!
The Markets
The futures market jumped at the 6 PM open yesterday evening, and prices of the four major indexes followed suit this morning. However, with volume very light, and thus buying pressure correspondingly light, prices didn’t run far.
On the other hand, Treasury bonds finally cleared the 21-day MA on a substantial gap higher while the US Dollar fell back below the breakout level — a combo that could present a best-case scenario for stocks into year-end.
All of this is taking place on a day when volume is much lighter than the recent average. SPY, QQQ, DIA, and Bitcoin only traded about 70-80% of their 20-day average volume. IWM was heavier, with daily volume coming in at about the average.
This could easily be the busiest day of the week due to the coming Thanksgiving holiday on Thursday. So we should expect a further slowdown.
The Charts
SPY traded at new highs briefly before drifting lower to close the morning’s gap.
QQQ officially closed the Nov. 15 gap and came back to close near the election AVWAP. We’ll keep watching that and the $503.52 pivot as a level of interest.
IWM had the fireworks today, gapping substantially higher. It held up reasonably well and, as mentioned previously, had a higher relative volume than the other indexes. Today’s candle does signal a potential reversal, but with volume good and the RSI not yet overbought, maybe it has some insulation against further selling. We’ll see how it does tomorrow and during the rest of the week.
DIA held most of its gains, putting in another new all-time high.
TLT finally made real progress today, moving well above the 21-day MA and bringing the 8-day MA into a rising condition. It will need to deal with potential resistance in the $93-$94 area with a pivot level, the 200-day MA, and then the 50-day MA.
DXY The Dollar is back below the breakout area to test its 8-day MA. The best thing for stocks would be for this to develop into a ‘failed breakout’ scenario, sending the dollar lower. Given the sharp reversal after hitting the bull-flag price objective on Friday, that could be exactly what happens.
BTCUSD saw some selling pressure today, moving back below the 8-day MA for the first time since this incredible move began on election day. If it continues lower, there is potential support at the AVWAP and 21-day MA, both just below $88k.
The Trade
Looking to year-end, the jump in bonds and the corresponding interest rate relief combined with a decline in The Dollar could make for a very interesting rise in stocks.
For the rest of this week, though, trading activity will continue to be light, making it a perfect time to slow down and take a break. There will not be a Market Update article on Thursday.
Instead, I will embrace this quieter period by celebrating and expressing gratitude for the blessings of family, health, trading, writing, and all of you who continue to read and support my work here.
Have a wonderful week!
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.
Looking For More?
Elevate Your Trading Adventure Even Further With These Offerings.
EpicTrades Options Newsletter
Real-time trade ideas and insights, providing actionable trading insights focusing on options trades with short-term horizons, aiming to capitalize on weekly market movements.
The approach includes detailed reasoning for trades, specific options, and profit targets, focusing on quick gains with less time commitment required from subscribers.
The Inner Circle
The Inner Circle is a Virtual Trading Floor (VTF) at T3 Live. It’s the group I’ve been working and trading with since 2022. You may have noticed the logo in the watermarks on my charts.
Founded by David Prince and led by him, Rick March, and Kira Turner, the Inner Circle is a community of elite traders, including hedge fund managers, family office heads, corporate executives, financial advisors, and even professional poker players.
Fundamental, Macro, and Technical Analysis all combine to find and discuss the best opportunities in current markets.
