Short term technical state of the market…

Posted on Dec 29, 2016 by in Letters

http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p70142979615&a=266398464

Evaluating the volume here it is clear something is up--probably accumulation.  Nonetheless the wave which started Nov7 is now consolidating (or, less likely, reversing).  The trendline is well broken and today we saw the full effect of that.  The trendline is running through a rectangle as defined by the two horizontal lines.  This shouldn't be a big deal -- possible implications are about 30 points, and there is support at the 2210-2190 zone.  We are not bothering to hedge, and we are not doing any buying until the rectangle is throughly overcome.

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