This promises to be a busy week, but maybe not in the markets. US stock exchanges will shut on Thursday for the Thanksgiving holiday and close early on Friday, writes Ian Murphy of MurphyTrading.com.
Meanwhile, the soccer World Cup kicked off yesterday and is expected to draw a global audience of five billion people, while the week ends with the Black Friday shopping extravaganza. So, there will be lots going on but probably not with stocks.
Thanksgiving week is also a good time to run our quarterly stock filter because trading volumes dry up as the week progresses and over 70% of S&P 500 (SPX) firms had reported by last Friday. I run this filter at the end of February, May, August, and November to generate watchlists for the FBD and Diesel strategies.
The 52-Week Strategy did not trigger an entry on Friday as the indicator ticked down (arrow) and the weekly price bar ended the week negative (magnified). Admittedly the price bar was almost flat, but a good trigger will be a tall strong positive bar, that was not the case on Friday.
Part of me was glad we had no trigger because I would love to see a much deeper washout of the October lows and a proper capitulation among stockholders. This would set us up for a prolonged and powerful rally on the S&P 500 next year.
Learn more about Ian Murphy at MurphyTrading.com.