SPY: First week of DECEMBER for AMEX:SPY by Steversteves

Boeing Analysis

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BA

AMD Analysis

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AMD

TSLA Analysis

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TSLA

NVDA Analysis

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NVDA

Side Note:

I kind of neglected the futures traders last week, who I know comprise a fair amount of those who follow me. I apologize, I will also post ideas for ES1! and NQ1! into Sunday night :-).

I did trade futures a bit last week, but because I have been avoiding the indices, I am not as active on that side of things.

On to the analysis!

So Christmas theme time. However, it’s just an attempt at lipstick on a pig, or in SPY’s case, lipstick on a whale

Because it’s just constantly being fed by greed and over-exuberance that has become devoid of really any meaningful rationality. Not to say that pigs and whales are this way, as I am an animal rights lover, but you know what I mean ;).

My true #1 Rule that has unwavered over time

If you have followed me over time, you will be familiar with my #1 rule that has been unwavering over time and was even helpful during the 2022 bear market. And what is that rule?

NEVER, and I mean NEVER! Short over Novembers or Decembers.

This is the one thing that has been true almost always since my beginnings in 2018, almost ALWAYS. Market sentiments change each year, and market behaviour changes each year, but this rule never falters. The slight exception was in 2022, the last week of December was a bit bearish, but likely owning to the FUD leading into 2023 and not before the market pumped from November until the end of December.

How much further up?

Judging by the high prob targets on SPX and ES1! 6 month range, it looks like we have another 1.5% ish to 3% ish move up:

And SPX:

Quick note on Seasonality

I know this may seem conflicting with my rule of never shorting into December, but traditionally we generally see pullback/selling into the beginning of December and then an equal push and santa rally into the end of December.

We can see it a bit better if we use my own Seasonality indicator and limit the lookback over the last 3 years (vs the one above is over the last 29 years):

We can see that it’s actually net positive in December at an average daily gain of 0.03%. Meaning, that some selling happens but then the buying outpaces the selling.

Most seasonality charts, that you can look up just online, indicate traditional bullishness into December.

Targets

Immediate weekly targets are in the chart above.

We also have new monthly targets:

We essentially broke out of the bullish condition in after-hours on Friday and the ultimate TP being around 471.

New ATHs?

While it is possible QQQ makes a new ATH towards EOY:

An ATH for SPY is unlikely.

Will we get pullback?

I caved and I am long on SPY, but pullback into next week is possible, to re-test the bottom of the bear threshold on the month.

Based on momentum and greed, its kind of unlikely I would say, but its possible.

Pullback, imo, is likely to come towards the end of December (if we continue to rally throughout December) or into January.

I believe January will set the tone of what to expect for 2024 based on how we are finishing off this year.

Those are my thoughts!

Safe trades everyone!

NOTE:

I will likely not be updating this idea as much.

If you want to follow intra-day updates on my go-tos lately (NVDA, AMD, BA), you can tag along on those individual ideas. Will keep my thoughts more organized this week.

Take care!