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U.S. Stocks Rally Following Black Friday Returns

Institutional money and positive sentiment have driven U.S. stocks higher on the Wall Street open. For the first hour of trade, the DJIA is up 350 points and the S&P 500 SPX has gained 35. Thus far, the sales numbers from Black Friday look to be very positive, prompting traders to assume risk in U.S. equities.

Today marks “Cyber Monday,” traditionally the biggest online sales day of the year. The markets will be watching returns closely, attempting to forecast holiday spending season performance and potential Q4 GDP growth. Earlier, the Chicago FED National Activity Index (Oct.) came at 0.24, over the previous release of 0.14. The gains broke the recent trend of underperforming academic metrics, signaling an uptick in consumer activity and inflation.

A Strong Weekly Open For U.S. Stocks

Following an exceptionally negative holiday week, the DJIA is off to the races on a positive note. December E-mini DOW futures echo this sentiment, rallying toward topside resistance and 25000.

December E-mini DOW Futures (YM), Daily Chart
December E-mini DOW Futures (YM), Daily Chart

If the current rally gains steam, here are some topside levels that may come into play:

  • Resistance(1): 38% Current Wave Retracement, 24727
  • Resistance(2): Bollinger MP, 25111
  • Resistance(3): Daily SMA, 25383

Bottom Line: A counter-trend scalp from the 38% Current Wave Retracement (24727) isn’t a bad trade to kick off the week. For the rest of the session, I will have sells queued up from 24724. Using an ultra tight stop at 24736, this trade produces a fast 8 ticks on a sub-1:1 risk vs reward management plan.

At press time, it appears that the DJIA is determined to revisit 25000. If the sales numbers from Cyber Monday come in as expected, it will likely be a strong week for U.S. stocks.

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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