A Key Support Level Is on Tap

The S&P needs to hold this level for bulls to remain in control.

Follow @MrTopStep and @BretKenwell on Twitter and please share if you find our work valuable. 

Our View

While much of the headlines were dominated by Ukraine and Russia, the real story was German authorities are stepping up preparations for emergency cash deliveries in case of a blackout to keep the economy running. That’s as the nation braces for possible power cuts arising from the war in Ukraine. Despite a consensus at the G20 for Putin to get out of Ukraine and stop threatening the use of nuclear weapons, he continues to attack the power grid. 

I have said for months that the people of Ukraine will freeze to death over the winter and that it's going to spread throughout Europe. The German story about hoarding cash to pay for energy costs is all part of Putin's playbook. He can't win on the ground so his plan is to destroy the country.

Geopolitical news continues to dominate the headlines, and when it’s something like a Russian rocket landing in Poland, the algos are surely going to take the S&P for a ride. 

Our Lean — Danny’s Take

We all know how the S&P hates uncertainty and I believe this winter will be full of it. That said, remember our Thursday/Friday rule. 

Or more specifically, we have to go with the PitBull’s trading rule that if the ES is weak late in the day on Thursday, you buy some cheap calls for Friday's November options expiration. 

According to the Stock Trader's Almanac, the week before Thanksgiving has the Dow up 19 out of the last 28 occasions — about 68% of the time — but down the last 4. And Friday's November options expiration has the Dow up 14 of the last 19 (73.6%). 

I’m also going to add the Ned Davis S&P and Nasdaq cash study for you to review (found here — and please do not share this document). 

Our Lean: