Finally, Santa delivered a four-day methodical move that traders could have stayed with. Tuesday we got a nice gap and go that never wavered and closed strong! Investor’s Business Daily put us back into a confirmed rally and there were igniting bars in several sectors.
Wednesday started off discouragingly, but provided a buyable pull back that held all retracement rules and closed strong, although the Nasdaq was weak following Oracle (OCRL) earnings miss. Thursday we saw some upside follow through with some leaders and laggards, with the banks even acting the best following ‘Euro Tarp’.
Today S&P futures are up about 5-7 handles and approaching the 200day moving average at 1259. This is an area to trim any longs you have left from earlier in the week. 1260-1266 would be a very big spot to close above, but I would not add through this point if it tries today. The next big level would be 1292, the high from October. As of now, the momentum is on the side of the bulls and theirs to lose. This week was the definition of a “Santa Claus Rally”. It was not super-powerful like some oversold bounces we have seen during the past few months, but at this point we take what we can get.
I would not get too punch drunk excited about this and fall asleep going into New Years! I will be taking most of my profits into this up open.
I wish everyone a Happy and Healthy Holiday. Enjoy your families. I will have my 2012 thought by the end of the day or over the weekend
Disclosures: Scott Redler is long SPY GOOG AAPL GS
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!