Hello folks!
Happy Thanksgiving!
I got a short market recap for you all before I get into my holiday festivities.
In my Friday webinar, I mentioned SPY could see the 20 day moving averages before another leg higher.
As of now, this test has yet to happen and SPY is trying to close the weekly candle above the bear flag and above the COVID 2020 low trendline.
If the market can close above these levels after Friday’s close, it would be a great first step for bulls for an end-of-year rally. At this point, it seems most probable.
Let’s check out the charts.
Purple Line – COVID 2020 Low trendline
Red zone – Supply Zone
Green Zone – Demand Zone
Grey Boxes – Darvas Boxes
We’re working on our 5th Darvas box of 2022.
On average, we see 8 candles per Darvas box in 2022.
Today was day 8 for our current box and before the close, the box closed higher out of the box.
As you can tell from the chart, when we consolidate in these boxes for a sustained time, a large move typically occurs.
Assuming we can hold this level through Friday’s close, then we will have another element in favor of a rally into the end of year.
Seasonality speaking, this is the most bullish time out of the year.
We are now seeing VIX break down through a 12-month trendline on the daily chart.
Everything is adding up to be bullish correct?
That’s how I’m seeing the market; however, holding a bias can be a hindrance.
I recommend taking the approach that the market appears bullish until proven otherwise.
If SPY were to flush on the day after Thanksgiving, like it did last year, then I would be very hesitant to be bullish.
Another rejection at the top of the bear flag trendline and a rejection out of the COVID 2020 trendline would not be ideal for bulls.
A close below the Darvas box would also be concerning for bulls.
Friday is a big day for me technically speaking.
Be nimble in these markets and take the market day by day.
I will be going live again on Friday at 12:30 pm ET for a Q&A and an additional market recap. Remember, the market will be closing at 1 pm ET on Friday.
Please feel free to send any questions to me at [email protected] and I will be sure to answer you via email or during the live session.
We will also be doing a Black Friday sale on Friday and Monday so be on the lookout for the sale if interested. As a subscriber, you will have priority on all questions and a more detailed market outlook.
This is one of the few days out of the year that we mark down subscriptions substantially so if you are interested, this weekend is the time to get the best deal.
In the meantime, we have a lot of food to eat, family and friends to relax with, and plenty of football to watch.
My Dallas Cowboys kick off at 4:30 pm ET on Thanksgiving so some well wishes would be appreciated!
Also, if you’re reading this, you are considered privileged by a global standard so remember to be thankful.
It really is a privilege to be able to talk markets to you all for a living so I appreciate all of my subscribers who support me.
Thank You!
My best wishes to you and your family during this holiday season.
–Dylan
(Head Analyst)
