Technical Analysis:

  • For the past eleven trading sessions, the S&P 500 (SPX) has traded in a sideways trading range. 
  • This isn’t unusual for this time of the year as the volume dries up and the big players on Wall Street head to the Hamptons and neglect the market. 
  • Tomorrow will formally start the Santa Rally, which is the last three days of the year and first two days of the next trading year. Last year though, this time frame was a disaster for the market. 
  • The day after Christmas (the 26th) has historically been the most likely day to trade higher out of the entire calendar year. That was yesterday and the market was closed yesterday, but I think those statistics apply to the next trading sessions following Christmas, rather than the 26th specifically. 
  • Traders still anxiously await for Dow Jones Industrial Average (DJIA) 20,000. It is really a meaningless achievement for the market and shouldn’t be seen as anything of significance.
  • SPDRs S&P 500 (SPY) had its lowest volume day of the year on Friday – even less than the half day of trading following Thanksgiving, just over a month ago.
  • Some lower-highs forming on the 30-minute chart of SPX, but no definitive lower-lows. Trading sideways at this point. 
  • Light Sweet Oil Futures (/CL) remains in a long-term bullish pattern as it exhibits a solid inverse head and shoulders pattern over the last 15 months.
  • For now the market remains very bullish and shows little to no indication it desires to pullback in the near term. Trying to front-run a market top at this juncture is a very futile exercise and should be avoided. Wait for the market to show signs of cracking via price action before getting net short on this market. 
  • So far the market is basically ignoring the rate increase entirely. There has be no impact so far. Last year, the selling picked up considerably right at the end of the year when the traditional Santa Claus rally typically kicks off.

My Trades:

  • I did not add any new positions to the portfolio yesterday. 
  • I did not close out any positions in the portfolio yesterday. 
  • I will look to add 1-2 new swing-trades to the portfolio today. 
  • I am currently 40% Long / 10% Short / 50% Cash

Chart for SPX:

s and p 500 12 27 16