Technical Outlook:

• A very dull tape yesterday that gave up all of its day’s gains until it managed to rally 14 points in the final 30 minutes of trading. 
• The last 30 minutes was a significant short squeeze on the bears, and it is the first one of its kind that we have seen so far in the month of December. That behavior was not present last week with the 3-day bounce the market received. 
• 1993 continues to be a significant line in the sand between current price and revisiting those lows from August/September again. 
• Heavy sell-off in volatility as VIX dropped below 20 again, falling 9.7% down to 18.7. 
• T2108 (% of stocks trading above 40-day moving average) rose 13 points to 23%. Still, very oversold. 
• SPX 30 minute chart has a potential base forming. Break above 2024, would confirm that break out of the base, with a potential target of 2050-2060 before hitting any resistance. 
• Volume deteriorated greatly yesterday – not even half of what we saw on SPY from Friday. Though this is not unexpected as this is the week of Christmas, a shortened holiday week, and the week that volume will continue to deteriorate as the week moves on. 
• Divergence (bullish) over the past three days with the selling that was seen, as the VIX did not make new closing highs for December, despite SPX, Nasdaq, and Dow Jones Industrial making new closing lows for the month. 
• T2108 (% of stocks trading above their 40-day moving average) dropped 22 points to close at 20%, but it too did not create a new closing low. 
• This week and next represents the two best back-to-back weeks of trading in the market from a historical stand point. 
• SPY is sitting on a critical support level at $200 that, if it manages to close below, would likely mean an eventual retest of the September lows. 
• 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”.

My Trades:

• Added three new long positions to the portfolio yesterday. 
• Did not close out any positions yesterday. 
• I am looking to add new positions today based on direction and strength/weakness of this market. 
• Currently 50% Long / 50% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: