Stock Market Watchlist 27 Nov 2020

Today the market closes at 1Pm. I expect a continuation of the trends from Wednesday to carry into the first half of the trading day. Question is will investors be lightening up their positions into the weekend? As I’ve been mentioning in the previous watchlists, historical Thanksgiving seasonality trends help guide our investing and trading decisions, and it worked out phenomenally for us this week. Monday, Nov 30th is the last day of the month, which completes the November monthly candlesticks on charts. Anytime we close a week or month out, it can give us clues on what the strength of a market, sector, or stock is. It’s a good practice to review the Monthly candlesticks after the last trading day of the month.

As of this writing its (8:07AM EST) and we’re seeing overall continuation from Wednesday’s trend of green. SPY is up about $1 premarket from Wednesday’s close ($363.60 bid) and QQQ is up about $1.30 ($297.60 bid). IWM is just about flat in pre-market. What I’m noticing now is potential rotation of money back into tech stocks which we saw some signs of on Tuesday/Wednesday. The sector has been lagging the market as vaccine news caused rotation of money into retailers, travel stocks, airlines, etc. Names like AAPL / MSFT / FB / AMZN have been trading in a range, and consolidating for their next move. Based on Q4 seasonality heading into December, the index which comprises many of these names (QQQ) is starting to show signs of life again. This is a positive for the above mentioned stocks/sector. I’m expecting some big moves in tech moving into end of year.

No charts for today’s shortened session.

TSLA – (long swing – CAUTION!) – Full disclosure: going into today I am long TSLA but will likely cut position entirely, or very small into Monday. we’ve had another incredible run in TSLA and I am ringing the warning bell here to be careful chasing if you hadn’t already caught some of this move. We’re up pre-market with bids over $580. As I’ve been writing in the previous watchlists, I’d suspect a push towards the big $600 level, where it may need to cool off a bit. This cooling off could take days or weeks. On December 21st, TSLA will be added into the S&P as the largest company by market cap ever added.

QQQ – (long swing) – Full disclosure: I am long QQQ going into today, and will likely cut 75% of the position heading into next week. This swing I alerted in the group on Tuesday based on A. Chart setup B. Options flow C. Seasonality trends that we could see some rotation back to tech stocks. Wednesday we opened green and then had a slightly choppy day, but eventually closed on strength, which signaled to me to stay in the swing trade and not sell going into today. All the tech names I mentioned above are showing strength again and this will likely continue throughout December. This is going to be a hot market to be trading & swinging going into EOY (end of year).

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