Short, but not “short” Week

posted Nov 24, 2014, 10:02 AM by Katie Shook   [ updated Nov 24, 2014, 10:02 AM ]

Monday November 24, 2014

It’s Thanksgiving week, so it’s short.  So naturally I couldn't resist the pun of ‘short week’.  After all, we’re talking about 3.5 trading days as we head into the official Holiday Season.  What’s interesting is that some key economic data is still on the horizon that could theoretically move the markets.  I have to qualify this though, as I don’t expect the data to do much of anything this week.

On Tuesday we get GDP numbers, on Wednesday we get Durable Goods, Jobless Claims, Personal Income and Outlays, and New Home Sales.  These are typically market movers, but I wouldn't expect much this week.  What I do expect is a low-volume grind higher, continuing the trend of 3-to-7 points per day on the SPX.

If we take October out of the mix, this year has been remarkably low volatility overall.  It seems to me there’s no material reason for this to change during a week where many people are going to be checking out Wednesday afternoon and won’t check back in until next Monday.  Given the probability of fewer participants, I expect the volume to be low this week.  And the trend has been low volume, slow grind higher.  We’ll see if that trend plays out again this week.

The overall database has improved somewhat.  We’re at about 35.75% long as of today’s open.  It’s still very low, but that’s to be expected given the way volatility spiked in October.  A lot of positions got dumped.  It’s going to take some time to repair that kind of technical damage.  Remember the process:  it’s not about making money every time, it’s about making money over time.  Good risk management is a key part of this process.

Weekly Estimated Range

ScreenHunter_01 Nov. 24 06.18

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