Thanksgiving Week Price Action

Part of what we do is assessing data on multiple levels and trade according to statistical probabilities and outcomes. While we don't make trading decisions based on 'seasonality' per se, we do look for an edge when it comes to typical price action for certain periods, more specifically holiday weeks.

Below is the weekly price action for Thanksgiving Week the last 10 years for QQQ. Since the majority of the stocks we trade options on (for Pure Alpha since most of them are NASDAQ centric) and we do a good amount of QQQ weekly trades (both in Hedge Fusion and Pure Alpha as hedges), it likely gives the best broader or composite assessment of overall price action for a given period.

You will see that it is more the exception than the norm that either the weekly close, or the weekly high or low, breached the 2% threshold. This, along with our modeled data on individual stocks we trade, indicates that minimal, possibly no trading during this week could be wise.

In comparison, the week after Thanksgiving tends to offer more robust price action as indicated below.

In conclusion, any trades we do this coming week, we will likely 'shorten our backswing' a bit in terms of position sizing - size somewhat smaller. We have also analyzed the price action typical for the weeks leading into Christmas and the New year, and December is typically quite an interesting month in terms of potential.

We will do a thematic post next weekend for that, as we prepare to charge into the end of 2024 and into 2025.