Black Friday Sales Data

In my previous postings, I mentioned that the market would be remained positive this week. Well, it was practically positive for all four days this week for the Dow and S&P 500 indices. The Nadaq Composite Index was also positive by the end of the week. The major indices are now at or above the 23.6% Fibonacci Level as well as SMA 30. How the market move next week would probably depends on the Black Friday Sales data. It would ideal if the market have retraced to the 38.2% Fibonacci Level. Then it would be ripe for a reversal. But at the current level, it is still a good level for reversal though not as good.

The day after the Thanksgiving holiday marks the beginning of the Christmas Shopping. The sales data on that day, also called Black Friday and its immediate weekend could move the market significantly in the following week.

Based on news reports, most retailers were expecting weak Christmas sales this year. To clear their current inventory, they offered deep discounts (even APPLE is giving discounts!) at the expense of profit margin. As such, it may not be surprising that the sales data may be good. However, profit margin would be eroded and retailers might still lose money. The question is, how would the media spin the sales data - would they play on the gross sales or on the profit margin?

This week, I have been playing intraday playing long positions. My last intraday play this week was on SPY Call options. Made a small profit of $45 for every Call options contract. Since I am expecting bad reports on the Black Friday sales data, I have placed Bear Call Spreads positions on SPY, COF, RTH and TGT during the last 10 minutes on Friday. If I am wrong I am cushion somewhat by the time decay of the options. If I am right and see that the market is reversing its Bear rally, I would then increase my positions by buying Puts options.

Cheers !

PersianCat (Millionaire-in-progress)