Investors are getting ready for Thanksgiving week, one of the most exciting weeks for the US equity market, as the world watches the Fifa World Cup tournament that recently began in Qatar.
Some significant US economic releases, like the FOMC Meeting Minutes, could impact the market before Black Friday and Cyber Monday. They will disclose what the FOMC members discussed three weeks ago and potential stock reactions on Wednesday.
However, the short three-and-a-half-day workweek will probably be the main focus. The US stock market will be closed on Thanksgiving (which falls the following Thursday) and will only be open for a portion of Black Friday.
We learn everything from the name. In the past, Black Friday has seen retailers sell so much merchandise that they end the year in the “black.”
Hence, it is no wonder that stocks tend to rise during the Thanksgiving week.
Thanksgiving week has tended to be bullish
In the past, equities have increased during Thanksgiving. In the past fifty years, stock prices had risen by 0.54% per week, with Wednesday being the trading week when gains occurred 78% of the time and, on average, by 0.3%.
4,000 is a pivotal level for the S&P 500 index
The S&P 500 index has battled with the 4,000 level since May. Every attempt to move lower by bullish traders was met with buying.
A potential double-bottom pattern for the index can also be discussed. The measured movement suggests an attempt to set a new record high if confirmed.
On the bearish side, caution is advised, given the inability to break the string of lower highs. Before going long, bulls might want to wait for an index rally above 4,300 and a daily close above 4,000.
Overall, anticipate support for stocks this week on each dip. If there is a stock market rally, Wednesday is likely to see it.