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Why History Suggests Caution for the Thanksgiving Trading Week
The Fed was started in 1913, nearly all the inflation we have had in the U.S. has occurred since it was created. Coincidence?
Come join me as we dive in and see what’s moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
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Thanksgiving Week Trading: Why History Suggests Caution for 2024
As traders, we love a market that rewards our hard work with clear setups and clean breakouts. But Thanksgiving week? Let’s just say it’s rarely the gift we hope for.
In my decades of trading — starting way back in the late '90s — I’ve noticed a consistent theme: Thanksgiving week often delivers a choppy, lackluster market.
I started paying attention to this pattern years ago while visiting my grandfather in Atlanta. A retired Air Force Colonel and the first million-dollar trader I knew, he loved the markets.
We’d watch the charts on that half-day Friday after Thanksgiving, and it became clear that this week wasn’t the blockbuster event some traders might expect.
The data from years of watching Thanksgiving week has taught me one thing — this is not the time to bet on a "banger" of a trading week. Instead, the market tends to grind sideways, stuck in a channel that chops up overzealous traders.
This phenomenon isn’t limited to the S&P 500 (SPY) — the Nasdaq 100 (QQQ) and the Russell 2000 (IWM) often follow similar patterns.
Take the Nasdaq as an example...
Right now, it hasn’t even hit its key Fibonacci retracement level of 61.8%. It might pop up to test that level next week, which could provide some clarity — but even then, any real momentum is more likely to show up after the holiday.
The Russell 2000 has its own quirks, with recent price action showing a different pattern than the S&P 500 or Nasdaq. It’s also testing its 61.8% retracement level. But three-wave corrective moves like this one often indicate a continuation of the prior downtrend.
Let’s not forget the broader context…
It’s not just Thanksgiving week itself that struggles to deliver. The run-up to the holidays tends to see reduced market activity as institutional traders and big players shift into vacation mode.
That leaves retail traders in a thin, choppy market — where even the best setups can fail.
So what’s the strategy for next week?
Patience. Be selective. Focus on managing risk rather than chasing trades. The reality is this: While the market could surprise us, history suggests that Thanksgiving week is more about surviving the chop than hitting home runs.
Enjoy the holiday and don’t feel pressured to force trades. This is a week to protect your account — because, as I often say, the account you save may be your own. | | | | |
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