Weekly Watchlist Dec 01: Santa Rally Incoming?
Zweig Thrust Inbound!
Welcome back to another Weekly Trade Plan with The Dividend Journal! If this is your first time here, great timing. This newsletter is your one stop briefing to stay ahead of the market and step into the week fully prepared.
đŻ Initial Thoughts + TLDR
The market doesnât care about a short week nor low volume. Weâve managed to clear above the range and kill candles to technically qualify as a breakout attempt. We have a lot of data this week which will be very important given some of the recent uncertainty on a December rate cut.
We might also be getting another Zweig Thrust! The Zweig thrust measures how many stocks are advancing over a 10 day period. This has historically indicated a new bull phase because there is larger market participation in buying. Doing your own scans and identifying relative strength should also give you a better idea of how the whole market is faring.
There are definitely a lot more setups currently that look constructive than two weeks ago. Remember, the market usually goes up on lower volume anyways.
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Key Earnings & Economic Calendar
Monday, December 1: Manufacturing PMI
Wednesday, December 3: Non-Farm Employment Change and Services PMI
Thursday, December 4: Unemployment Claims
Friday, December 5: Core PCE and UoM Consumer Sentiment
Courtesy of Earnings Whispers:
đ Market Update: As of Friday, Nov 28
Despite the short week, the market overall has recovered quite a bit and with decent market breadth too. We are very extended from the EMAs, which dictate the trend of price. It would be healthy for the market to pullback or at least consolidate a bit to allow these EMAs to play catchup.
This is where I am looking to see a retest of the kill candle top and that should be where the 8/21 EMA cluster together. If we get that retest, that is where I would be looking to take on new long entries.
Bitcoin
From the lows, weâre up about 14% and price has seemed to stabilize a bit. Seeing how Bitcoinâs price action has preceded the rest of the stock market, any price increases would lead to believe the stock market will follow suit relatively soon.
There is still a lot of work to do to convince me that crypto can make a come back like reclaiming 100k, but no more aggressive selling is a good start.
đ What Iâm Watching
IBM 0.00%â: A fantastic weekly structure with one of the strongest weekly closes. I expect this name to play catch up similar to other semiconductor names like AVGO 0.00%â and AMAT 0.00%â. This is relative strength when you compare it to the sector and the leader NVDA 0.00%â.
LMND 0.00%â: This power earning gap is still holding strong and I will be looking to be buying strength as this name attempts to breakout. The key is to look for a high volume push and we actually hold above this breakout spot. Given the potential for more rate cuts and IWM 0.00%â looking very strong, mid cap names are likely going to catch a lot of steam.
RDDT 0.00%â: A very nice wedge pop occurred this week with relative strength compared to the market. I am looking for a continuation move as this previous week printed 2 inside days. A break of 220 is key and I view this as a quicker trade to target the 230 high.
đClosing Thoughts
As the market starts to expand a little bit, I am ready to put on size and be flexible to what the market is going to give us. We kind of have conflicting information as risk off names like KO 0.00%â and WMT 0.00%â are still really strong while risk on names are trying to rebound.
We likely will need data to get a definitive push and direction in the market, and this week could provide us that. First though, I would love to see a lower volume retrace to get an EMA crossover or retest of the breakout spot before going higher. The more extended we are from the EMAs, the less sustainable any more upward direction is.