Weekly market preview – trading plan for November 28, 2016

Weekly outlook — S&P 500 CASH INDEX

The S&P 500 cash index ($SPX) closed at 2213.35 on Friday, up 31.45 points for a 1.44% net weekly gain.

Last week: the SP500 index finally broke out to and closed at 2213.35 on Friday – a new bull market high.

This week: the week at the end and beginning of the month is usually a bullish period. The index will try to hold up for new higher level. The decisive breakout last Friday – even though the volume was thin – strongly suggests that we are in a trend with much higher highs ahead in the long-term.

Technical analysis

a) long and intermediate time frame

161125-spx-weekly

SPX to Nov. 25, 2016. Weekly chart.

The SP500 index is bullish for the intermediate-term. The last weekly price candle was completed by closing above the previous resistance level.

The weekly PMO is nearing a buy signal, and the STO indicator is rising but hasn’t reached overbought territory yet. All of them indicate the longer-term trend remains bullish and intact.

b) Short-term

161125-spx-daily

SPX, Nov. 25, 2016. Daily chart.

The S&P500 index had a minor pullback into the “breakout point” at 2193.81 for testing before the Thanksgiving holiday. It successfully held the price above it throughout the testing move and pushed the price back up for closing above the 2200 psychology support level.

The price action was bullish but still a little ambiguous. Due to the light volume, it could be interpreted as an exhaustion move, the buyers’ last gasp.

The rally of the past 15 days creates a very steep uptrend line. Even though all indicators are rising, they are nearing overbought territory. A short-term pullback may occur, but we expect it could be very brief.

This week 2175 will be the first major support line for the index. Holding above it could bring new buyers in to push the index up to 2235-50 zone for new highs.

A move below it could run buyer’s stops and bring the index back into the former consolidation range from 2175 to 2135.

Daily outlook – S&P 500 MINI FUTURES (ES)

Member content

This section contains the detailed buy/sell levels for this week. It is reserved for paid subscribers. Previous market previews are available free of charge in the archives.

Want more?

You can get instant access to this valuable information and much more for as little as $9 per month. Please follow this link for the details.

 

Hi . Read or download the full trading plan here:

Download link: (161128-ES-plan.pdf, 430KB)

 

161125-es-daily

ESZ6 to Nov. 25, 2016. Daily chart.

ES spiked to a higher level for closing on Friday. It was the day after Thanksgiving – Black Friday – and the market was only open for half a day, so the volume was thin. The spiking price move could be treated as ultra-short-term exhaustion buy move. We could see the ES repeat last week’s range move today.

2203-2200 will be today’s key zone. Holding above it could give odds the impression that the ES still intends to test last Friday’s high area 2211.75-13.50.

A move below this key zone could lead ES to move down to retest last week’s low area 2178-75.50.

Short-term slow STO indicator has an extremely overbought condition and any strong early rally could meet sellers taking profits. The daily PMO indicator still accelerates, which hints that any pullback or sell off could continue to be bought by new buyers.

Support and resistance

Major support levels: 2195-93, 2183-81, 2172-74, 2165-62.50
Major resistance levels: 2220.50-26, 2235.50-37.50, 2245-48, 2252.00-56

Outlook

Short-term —- Bullish
Medium term —–Bullish
Long term —- Bullish