Technical Outlook:
- Strong day out of SPX breaking through the 20, 50, and 200-day moving averages.
- Surprisingly, the volume has not dropped off day-to-day this week, as volume on SPY was equal to that of the day prior.
- Declining resistance off of the December highs (short-term) will be tested today at 2064. It is important for SPX to break through this level and not create a sharp rejection.
- After that, there is a very key price level of 2076, the bulls will be challenged with. Breaking through that price level would create a higher-high for the market. Something we have not seen, in a very, long time (October 16th to be exact).
- After three days last week, the SPX stalled out and saw a sharp reversal – I don’t expect to see the same kind of reversal to day, and if we sell-off, I think it will be a muted sell-off. Christmas eve trading tends to be very muted .
- Today, is considered to the be, from a historical standpoint, the first “official” day of the “Santa Rally”, and runs through January 5th. During this time, SPX is higher 78% of the time.
- VIX continues to fall off a cliff – down 6.2% to 15.57.
- Strong uptrend currently in place on SPX 30 minute chart.
- T2108 (% of stocks trading above the 40-day moving average) formed a higher-high on its chart buy rallying another 29 points to 36%.
- Key support for SPY continues to rest right at the 200.00-level. A price point that has been tested and held 3 times in the past 2 months.
- There is a rising trend-line off of the September lows on SPX that has been tested twice in the past two weeks and held up perfectly.
- For the bears, still the #1 objective is to kill this 3-day rally and drive price back down below the lows from last week of 1993.
- Remember, time last week, the market was bouncing very hard and showing all the signs of a move back above 2100. So remain very skeptical of the current market environment.
- This week and next represents the two best back-to-back weeks of trading in the market from a historical stand point.
- A lot of talk about the “Golden Cross” taking place on SPX with the 50-day moving average crossing above the 200-day moving average. I don’t put much weight behind this phenomenon.
- For twelve years straight, the market over the course of the last 30 trading days of the calendar year, has yielded a net positive gain, and thus reinforcing the concept of the “Santa Rally”. In order for that to happen again, SPX would need to push above 2050 and remain there through year-end.
My Trades:
- Added two new long positions to the portfolio yesterday.
- Closed out FB at $104.63 for a 0.1% gain. Non-performing trade.
- Unlikely to add any new positions today on this shortened, low volume trading day.
- Currently 70% Long / 30% Cash
- Remain long UTX at $94.58, UPRO at $60.63, QLD at $76.77, ADBE at $92.42, and three additional positions.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
