It is thanksgiving week in the US and believe it, it is that time of the year on Friday when everyone gets out to buy “BLACK FRIDAY”. Let us start the trading week this thanksgiving week with a market update.
The economic calendar, the US markets will not open on Thursday 22nd November 2018 because it is Thanksgiving Day and half a day trading on Friday 23rd November 2018 as market closes 1pm Eastern time. Wednesday 21st November 2018 will be a full day of trading but volumes will be low as many Trader will take time off for Thanksgiving.
The market is bifurcated with lots of ups and downs, back and forth. It is a mixed market now. The trend trading tools such as the Moving averages are not as practical in this type of market. On the DOW JONES, I am of the opinion that above 25600points means the bulls are back and below 25000points indicates the bears are back.
If we can break the upside above 26000 points, we should be through all the back and forth. Seasonality predicts though not a guarantee that the month of November and December are always good trading months however, it can easily turn bearish and the target is 24500points down to 24000points for the DOW.
Last week was a bearish week because of the evening star reversal pattern from the previous 3 trading sessions before the start of last week and it was indeed a bearish week see post from last week here.
As of now we have we ended last week with 3 trade sessions for a morning start reversal pattern which means this week will be bullish (I am optimistic), just remember that the US markets are not opened all week.
The market is neutral and could go any direction because the Oscillators such as Stochastic are bearish, RSI is bullish and MACD is technically bullish crossing the zero line. The market is giving mixed signals.
The S&P 500 is more bearish than the DOW with similar candlestick pattern such as the end of last week ending with a morning star reversal pattern. S&P 500 is running to resistance and if we break through we should be up and through and if the resistance holds 2600 will be the downside target and of it goes below that we will cross the bridge when we get there.
Trade idea for the week
Apple (AAPL) is being deal with some set back lately, we were in $225 in October and now $190 a share. There are possibilities but as we get into thanksgiving I think it is good to get into this trade.
A Bull Put Spread only for the Neutral market
Your entry target is for Apple is when stock is at $194
End of month expiration November 30th 2018
Sell $185 for 1.40 and buy $182.50 for 1.05 giving you good credit. You can get 14% RoI in one week.
My plan for the rest of the week will be to post educational materials for stock trading and options because this week will be a slow and half week trading stock in the US markets. Stay put for educational post and mental preparation post for better trading as we go into 2019.