Technical Outlook:
- Heavy pullback in a shortened trading session on Thursday put the market back in the red to close the day.
- With the move, SPX lost the 50-day and 200-day moving averages.
- Morning weakness across the indices hinging mainly on the strong sell-off this AM in crude.
- Key this week, with low volume trading, is whether it can continue on with the gains from last week. Historically, this week and last is the best two-week trading set of the year, and is where your infamous “Santa Rally” kicks off.
- On SPY the absolute key level for it rests at $200. A break below this level would send SPY firmly into bear territory.
- VIX found some support in the upper 14’s, and rallied back up 1.1% to 15.74.
- SPX needs to get back above 2076 – in doing so, it will form a higher-high. Between that price and 1993, it remains range bound.
- Sell-off today would mark near-identical behavior over the past five trading days to what was seen the five days prior.
- T2108 (% of stocks trading above their 40-day moving average) managed to rally 1 point to close at 37%. Still a very oversold reading.
- The rally from last week did little to alleviate oversold market conditions.
- Strong uptrend currently in place on SPX 30 minute chart but could be threatened with a sustained move below 2055. Needs to confirm the double bottom on its chart by climbing 2076.
- 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.
- 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 stay above 2050 and remain there through year-end.
My Trades:
- Did not add any new positions on Thursday.
- Closed out CPRT at $37.96 for a 2.2% loss.
- Not expecting this to be a heavy trading week for me. Active trading for me to resume next week, to start the new year.
- Currently 60% Long / 40% Cash
- Remain long UTX at $94.58, UPRO at $60.63, QLD at $76.77, ADBE at $92.42, and two additional positions.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
