Holiday Mood Continues, But We're Ripe for Some Profit-Taking
Bulls are focused on a possible rare Zweig Breadth Thrust. Here's what to know and my trading game plan.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Indexes are indicated higher for the fifth straight day as we wrap up a very upbeat Thanksgiving week. The Friday session is a half-day, with the market closing at 1 p.m. ET. The day after Thanksgiving is typically a positive, but thin session, but after the big run-up this week, there is a good chance of some profit-taking ahead of the Monday, which tends to be negative.
The month of November has been an interesting one for investors as AI leadership was called into question and the Russell 2000 (IWM) outperformed the senior indexes. The Magnificent Seven (MAGS) has bounced back like the rest of the market over the past week, but the S&P 500 and Russell 2000 have enjoyed better relative strength and have better technical health.
Bulls have been particularly pleased recently with strong breadth. This is a product of small-cap outperformance, but technicians are watching closely to see whether conditions are met for either a Whaley or Zweig Breadth Thrust. Both are bullish signals and are very close to triggering, although it is unusual for this to occur when the indexes are this close to a high.
The last Zweig Breadth Thrust triggered in April 2025 near the lows and resulted in a 25% gain for the S&P 500. The indicator will trigger again if the simple moving average of NYSE advancing stocks ticks up another 2%.
Of course, the bears are unimpressed and continue to fixate on aggressive valuations, a slowing economy, and sticky inflation. Increased odds of a Fed cut in December have made life more difficult for our pessimistic friends.
Whether the market can continue to trend higher from here is business for next week. On Friday, the only real question is whether there will be some profit-taking after a very good week. We have a positive open on the way and the smell of some FOMO in the air.
My game plan is to review positions and maybe make partial sales of the most technically extended. It is tough to find good entries after five straight positive days, so I’m not going to try to force any buys.
At the time of publication, Rev Shark had no positions in any securities mentioned.
