how to trade heading into the holidays

Afternoon traders. We’re back in your inbox with another market brief.

With yesterday’s dump, our last Substack post titled “time to short this rally?” appeared to be spot on (not to toot our own horn).

This will likely be our last market brief before the holidays, nonetheless let’s dive in to get you totally prepped for 2024.

Let’s jump in…

Impact Snapshot

• U.S. mortgage rates move lower for eighth consecutive week.

• U.S. third-quarter GDP growth trimmed to 4.9%.

• Jobless claims inch up to 205,000. Layoffs in the U.S. hover near record low.

Market Evaluation

Markets edged higher after biggest stumble in 3 months. All major indexes had rallied for nine straight days before Wednesday’s setback.

Thursday data signaled the economy was headed in the right direction, cementing bets for deeper interest rate cuts from the Federal Reserve.

The update primarily reflected a downward revision to consumer spending. Imports, which are a subtraction in the calculation of GDP, were revised down

Initial applications for US unemployment insurance rose last week by less than forecast, remaining near historic lows.

All eyes tomorrow for the PCE inflation which is Federal Reserve's primary inflation measure and will play a catalyst role for the market.

Markets Breakdown

Market experienced it’s biggest setback of over 3 months yesterday. We have to add context to moves like that and pay attention to where the market fell back into.

Since the last market update video over on X, we highlighted that the first key pullback zone was the 2-day short term balance area.

Market rotated towards that exact area and tested the extremes of the balance low.

Pay attention to the orange box across the screen, do you see how market simply found a rotational activity? 

Look above balance and fail = look at the opposite extreme of balance.

Bulls will want to accumulate the position inside this previous range that managed to form a 2-day balance area in order to find meaningful continuation to the upside.

For the downside, if we break and hold bellow 4736, we can see an attempt to fall all the way back inside the multi-day balance range. 

Acceptance into the previous balance area will favor rotations to the other extreme of it.

Exercise caution in tomorrows session as the impact of PCE can start another directional move out of balance.

ES

The targets we look for until NY close & Targets to pay attention Tomorrow:

• Upside Levels: 4801/4816/4853

• Downside Levels: 4736/4709/4689

That’s it for today’s brief.

As always, if you found ANY value in this Substack, all we ask is that you share these with just 1 (maybe 2) friends.

We hope you all have a wonderful holiday season!

-The QuantVue Team