Thanksgiving week has historically been a positive time for the equity market.  Since WWII, the S&P 500 has averaged a gain of 0.64% during Thanksgiving week with gains three-quarters of the time.  Market trends heading into this Thanksgiving aren’t as positive for the bulls, though.  As shown in the table below, during years where the S&P 500 was positive but up less than 5% YTD heading into Thanksgiving week, the index’s average change during the week has been 0.00% with gains less than half of the time.

On a day to day basis, for both all years since WWII and in years where the S&P 500 was up less than 5% heading into Thanksgiving week, Monday has been the worst trading day as it is the only day of the week with negative average returns and positive returns less than half of the time.  Tuesdays and Friday, however, have been positive days, though, with average gains of 0.10% and 0.29%, respectively.  Additionally, for those years where the S&P 500 was up YTD but up less than 5%, Tuesdays and Fridays have been even stronger with average gains of 0.26% and 0.35%, respectively.

As we move past Thanksgiving, though, seasonal trends for the market based on this year’s performance so far improve.  In those years where the S&P 500 was up less than 5% YTD heading into Thanksgiving week, the average gains the week after Thanksgiving was 0.41% with positive returns 55% of the time.  For the remainder of the year, average returns were even stronger at +2.83%.  Not bad for a period of just over five weeks!

The weekly AAII survey released this morning showed the first downtick in bullish sentiment (41.28% down to 35.09%) in three weeks.  Given the weakness in the broader equity market, the move lower in bullish sentiment is completely understandable.

As equity prices have fallen over the past week, bearish sentiment rose to 35.96%.  This week’s bearish reading is right around what we saw for most of October, so much like bullish sentiment, it is right within it recent range.

Neutral sentiment moved only slightly higher this week, as shown in the chart below.

This week’s report on jobless claims was slightly higher than expected coming in at a level of 216K versus estimates for 214K, but what has been pretty remarkable is how consistent claims have been over the last four weeks.  On 10/19, claims came in at 216K, the next week they were 215K, the week after they fell another 1K to 214K, and now this week they are back at 216K.  It’s also important to keep in mind that even though claims were higher than expected, they remain low on a historical basis with a record 193 straight weeks at or below 300K, 58 straight weeks at or below 250K, and 19 straight weeks at or below 225K.

With claims barely budging over the last month, the four-week moving average came in right at 215.25K, which is 9.25K above the cycle low of 206K we saw back in mid-September.

On a non-seasonally adjusted (NSA) basis, jobless claims came in at 230.6K.  While this is more than 120K below the average of 353.4K for the current week of the year dating back to 2000, in this same week two years ago, claims were actually lower.

Following further declines yesterday, every major US Index ETF in our Trend Analyzer tool is once again oversold.  The Micro-Cap ETF (IWC) and the Nasdaq (QQQ) have led the way down over the past week, falling 5.67% and 5.91%, respectively.  Ironically, looking at YTD returns, the similarities vanish.  IWC is now down the most YTD at 3.51% versus QQQ which is the leader YTD up 6.66%.  Regardless, this is still way off of the Nasdaq’s double-digit YTD returns earlier this fall.

In other words, it is harder to keep an optimistic outlook for longer-term trends anymore and this is reflected in the Bespoke Trend scores section of the tool.  Currently, only the Dow (DIA) has managed to keep an uptrend through all of the market turmoil.  Every other name has left uptrends and is now trending sideways; with IWC and the Russell 2000 (IWM) actually in downtrends.