The odds favored positive seasonality on the day before Thanksgiving, and that was what we had.
The indexes dipped suddenly at mid-day but bounced back strongly on the release of the minutes of the last Fed meeting.
The Fed minutes didn't contain anything new or surprising, but the market was reassured to hear the same message again that there is a likelihood that the level of interest rate hikes is likely to slow, but the terminal rate may eventually go higher down the road. The market likes the idea of a 0.5% hike in December rather than 0.75%, even if it leads to more hikes at a later time.
The action was pretty standard seasonal strength. Breadth was around 5,300 gainers to 2,800 decliners, and there were limited pockets of momentum. The action was primarily index-driven, but a few names like Tesla (TSLA) , Deere (DE) , and Dominos Pizza (DPZ) gave the bulls some things to celebrate.
Positive seasonality continues on Friday, but the S&P 500 is running into overhead resistance at its 200-day simple moving average, and we have Fed Chair Jerome Powell speaking next Thursday. The bulls may be able to keep this running, but it is going to be tough without seasonality and a friendly Fed.
The bulls are still looking for end-of-year strength combined with poor positioning to keep things running up, but the Covid issue in China and the macroeconomic situation are still major headwinds.
Have a great Thanksgiving, and look for my special holiday column tomorrow.
