S&P500 Condensed Weekly Holy Crow Missal: Nov 25 - Nov 29
The Heist
Image 1. Outgoing President Joe Biden
The marginal theme of ‘resurrection’ in last week’s Missal came due, with bulls finally filling the gap above on Friday - a week after liquidation that saw prices discounted into 5850. This past week was one of two-way trade, a larger auction of positioning into an end of year rally.
This is my take at least, and I stand by saying that ‘…the top [isn’t] in for the year just yet.’
This week may be the start of the final leg of the Biden Bump into year end, Santa’s new helper. He still has friends to pay back / forward while he’s in office! A reminder that the Santa Rally is the last five trading days of the year, and the first couple of the new year. I see too much disinfo regarding this on social media.
Reverend Bird’s Homily and Weekly Context
All the content in this week’s Missal is free given the short week. I’ll be sharing educational material for the subscriber Birds in the next couple of days as well, and the Crow Founders can look forward to this quarter’s macro note and dividend picks.
A reminder that all Crow founders have access to my chart book. I’ll offering a 15% off special this week in case you’ve been on the fence with an upgrade.
My main focus this short week is trade into the upper area of balance - fitting in with last week’s Missal theme of ‘resurrection’, or higher. That part of the thesis is correct, now it is on buyers at the lows to pass into and through the upper balance to challenge the untested ETH high. The have a selling tail to fill along the way.
Sellers on the other hand have a tougher job as supply is probably located higher - think about it, would you rather sell at 6000 with the rest of the crowd or wait for better prices? However, their main goal is to take out the weak low and cement a return to the lower area of balance, targeting the opposite side.
I trust the logic of these two scenarios and keys to unlocking further levels in each is clearer now.
Image 2. ES balance and daily profiles, structural levels
We have some significant data on Wednesday before sending everyone off the banquet table. It has the potential to move markets, especially as volume is expected to be thin this holiday week. Finally, a look to the hourly chart below which does good visual representation of a breakout scenario from the upper rail (grey) - the rise line is a suggestion of a potential measured move.
Image 3. ES 1H chart
Consider the mini-tail of Friday balance the weekly pivot.
Monday’s Action
I will be using the 6001 level as the day’s pivot. It’s a straightforward psych level, especially on a gap open - which may be setting up as of writing. That would maintain the gap above the 5993 poor high. Time spent below the pivot may unwind some of the psychological allure of 6000 euphoria of traders, leading to more two-way trade within Friday’s value.
A gap and hold would be more likely to scurry into the weak high at 6035. This roughly coincides with 6030 halfway mark of the measured move.
Areas of potential selling are often that structurally simple - 50% and 100% extensions. The best traders keep it simple, and market structure is about as pure as you can get which I why I stress that it is fundamental to understanding the market.
Any market.
Image 4. ES liquidity levels.
We are technically OTFU on all time frames. Buyers are in control until a prior day low breaks.
The Week’s Events of Note
A holiday week, however with significant data leading into the break.
Tues Nov 26: consumer confidence, new home sales 10h00EST
Weds Nove 27: unemployment, durable goods, preliminary GDP 8h30EST; PCE, pending home sales 10h00EST
Thurs Nov 21: Thanksgiving holiday
Weekly Levels and Monday Plan
Weekly pivot 5966. My model currently indicates potential for a 104 point range, and possible 13 point extension. Careful going against trends on a low-volume week!
6135 fib extension
6110 Odin at Valhalla
6080 fib extension / measured move
6053 untested high
6035 balance VAH / weak high
6001 DAY PIVOT / psych
5966 WEEKLY PIVOT / mini tail
5920 heavy volume
5908 weak low
5877 poor low
5822 election gap
a) Bid of pivot, time over 6015 looks to trade into balance POC 6026 and weak high 6035 - where responsive selling may be encountered. Volume above could target 6045 and untested ETH high at 6053 for longer-term selling.
Buyer LIS 5986.
b) Aggression below ONL 6006 / pivot targets a gap fill 5994, with volume into Friday POC 5986, VAL 5977 where a bid may be encountered.
c) The 15.10 level may be used as a VIX proxy pivot today. It is being actively suppressed so I place less weight on it.
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