Technical Analysis:

• Volatile trading session to start the year with the initial gap up being all but squandered before the end of day rally restored much of the day’s morning gains. 
• This was the first time S&P 500 (SPX) has traded higher during the “Santa Rally”. Today will be the last day of this  rally – so far the return has been negative for the market. 
• Expect some short-term resistance between 2259 and 2272 on SPX today. 
• Clearly the market has lost some of the enthusiasm that it portrayed the couple of months following Donald Trump’s election victory. Careful with continuing to add new trades to the portfolio here. 
• Volume has increased on SPDRs S&P 500 (SPY) over the past two trading sessions and returned to average levels. Much more liquidity than what we saw during the days before and after Christmas. 
• Bullish kicker on SPX yesterday, where following a selloff, the bulls gap above the previous day’s opening price and closes higher. 
• The 5-day and 20-day moving average were recaptured yesterday. 
• SPX on the weekly chart is putting together a nice bullish flag. 
• The “January Effect” which many believe is a barometer on how the rest of the year will fair, has been right only once in the last three years. Consider the fact that 5 of the last 8 years January has performed opposite of the total returns for its given year. 
• CBOE Market Volatility Index (VIX) snapped its six-day winning streak with a sizable -8.5% sell-off down to 12.85. 
  
• Light Sweet Crude Oil Futures (/CL) experienced a massive sell-off yesterday after gapping higher for the year and forming a bearish engulfing candle pattern. Lots of caution is warranted here on the oil trade. 

My Trades:

• Increased my exposure on the long side, up to 50% while maintaining my 10% short exposure. The rest is is cash. 
• I added two new long positions to the portfolio on Friday. 
• I did not close out any positions yesterday. 
• I will look to add 1-2 new swing-trades to the portfolio today. 

Chart for SPX: