Technical Analysis:

• A much cleaner trading session for the bulls, as the market opened and rallied higher on the day, leaving little doubt as to who was in control during the session. 
• Biotechs saw a solid push higher yesterday which provided the market with a solid floor to work from. 
• Nasdaq (COMPQX) looked re-energized yesterday and poised to retest its all-time highs from last week. Year end price action in this index was very concerning. 
• The 5-day moving average on the S&P 500 (SPX) was recaptured yesterday by the bulls and puts the index right back at all-time highs again. 
• Volume on SPDRs S&P 500 (SPY) dropped off yesterday and has declined for a second straight day. Yesterday’s reading was also below average. 
• FOMC Minutes released yesterday had no meaningful impact on the market. 
• CBOE Market Volatility Index (VIX) has continued its hard reversal yesterday, dropping another 7.3% down to 11.85. 
• Strong recovery out of United States Oil Fund (USO) yesterday as price popped back above the 20-day moving average and looks more range bound over the last month. Play the range for now. 
• Expect some short-term resistance all the way up to 2278 on SPX today. 
• Despite the rough start to the Santa Rally last week, it still managed to finish the relatively bullish period, with 2 points of total gains on SPX. 
• 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. 

My Trades:

• I closed out my short position in IBM for a loss and closed NEE for a flat trade.
• My current market exposure is 50% long and 0% short and the rest is cash. 
• I added one new long position to the portfolio yesterday. 
• I will look to add 1-2 new swing-trades to the portfolio today as well as a new hedge to the portfolio.

Chart for SPX: