Saturday, December 24, 2011

Stock Market Outlook - Will Santa Stick Around a Few Extra Days??? - 12/24/11

Hi, traders.   Hope everyone has a wonderful Christmas Eve and Christmas Day spent with family and friends.  If you don't celebrate Christmas, I wish you happy holidays as well. 

We had a fairly typical Santa Claus rally this week in that it came on low volume and besides Tuesday, the sessions were slow and griding.   Monday proved to be the curveball as the selling was nasty, but then (as I discussed last week), the market screwed the bears and took off Tuesday.   The key is now to figure out where we go after Christmas - will Santa stick around or will he take off back to the North Pole at first chance?
S&P 500
Charts from TC2000, Courtesy of Worden Brothers, Inc.

The S&P was able to get above the key 200 day moving average level that has been so much trouble for the past two months, and Friday's move also took it out of this 2-3 month coiling pattern.   Hopefully, we can see further upside from here and get a nice little trend going into the new year.   The Nasdaq, however, continues to lag the S&P and still has some work to do, with several levels of resistance ahead.   Honestly, I am open to anything here - I have setups ready on both sides.  Typically, the week after Christmas is bullish and since I get the sense that many people are going to be expecting a pullback after four straight positive sessions, I guess I'm leaning bullish this week.  If the S&P tanks Monday, however, I'll be looking to short.   This remains a market where loyalty to one side or the other will get you hurt big-time.

I made two short videos for the week ahead - one looking at long candidates and one looking at potential shorts.  I am actually seeing more short candidates right now in my scans, which is another reason I am leaning slightly bullish this week.   Yes, that makes no logical sense, but with this market, doing the opposite of whatever makes sense seems to be the best game plan.   Regardless, I repeat - be ready with both short AND long candidates and you should be OK.

Long Candidates
Short Candidates

Best of luck this week and again, have a very merry Christmas and happy holidays to all!  In Pittsburgh, this video is sort of a tradition with our Steelers.   If you want to see an NFL Hall of Famer and well-respected coach recite The Night Before Christmas, check this out.   Pretty cool.   Take care everyone.

1 comment:

Ghost Shadow said...

Thank you so much for so unselfishly sharing of your time, and market expertise with all of us. It is so much appreciated!!

Happy holidays to you and yours, and a very prosperous and Happy New Year!!

-Joseph Pereira