Why I expect a pullback early next week

As expected the market moved higher today. The uptrend
combined with the strong seasonal bias helped push it along. The Friday after
Thanksgiving is also typically strong. The indices are a bit extended and in
need of a pullback. (Need evidence? Consider the fact that the SPY has now
closed higher 9 days in a row. This has only occurred once before — during
September of 1995 when it had 12 consecutive higher closes.) Overall, not much
has changed since Monday’s column. I am still expecting a pullback early next
week. Any gap up or strong move higher Monday morning could be ideal for
shorting into.

I’ve traded the Friday after Thanksgiving for several years, so let me tell you
how it works. The market opens at 9:30. Trading takes place for about 20
minutes. After that, the bids and offers just sit there and stare at each other
in a tryptophan induced daze. Occasionally, a big player will notice everyone
else is asleep and try to move a stock to their advantage. At 1 pm the closing
bell goes off, waking everyone up and sending them home. It’s a good day to
trade very passively, since follow through on most anything will be poor.

Keeping it short today…enjoy your Thanksgiving,

Rob

Rob@HannaCapital.com

For those who may be looking to expand their
knowledge beyond just market timing, my
Hanna ETF Money Flow System utilizes the VIX in generating trading
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Rob Hanna is the principal of a money
management firm located in Massachusetts. He has spent the last several years
developing and refining methods for trading in stocks across multiple time
frames. He selects stocks using both fundamental and technical criteria, and
then trades them using technical analysis techniques.