Market Breakout Fueled By Seasonal Strength – Look For Grind Higher
POSTED BY PETE STOLCERS ON NOVEMBER 21
Posted 9:30 AM ET – Yesterday the market regained its footing and this morning it is challenging the all-time high. We are in holiday mode and the trading volume will be light. Retailers are reporting decent numbers and that will help heading into Black Friday. I will add to call positions if the SPY can close above $259.
Seasonal strength will fuel the rally and hopes of a tax cut before year-end will keep buyers engaged. Even if the tax cuts don’t happen this year, they will happen soon.
The debt ceiling negotiations could provide a speed bump, but as usual the “can” will get kicked down the road at the last minute. The market does not see this process as a threat.
Swing traders should be long calls and they should add today. Use $256.50 as your stop on a closing basis. As a market moves through resistance we will raise the stop once we have a cushion.
Day traders should be cautious during the early rally today. Make sure that the gains are going to hold and trade from the long side using SPY $259 as your guide.
If the early rally reverses and stalls out, patiently wait for the next attempt before adding to call positions.
If the market momentum continues early in the day we will see a nice breakout.
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