And so Santa delivered a little cheer for the bulls! I have to tell you, one of my friends at work was telling me how he had a rough Christmas Eve and day because of the market action. Goodness gracious, it doesn’t need to be like that! The market is going to go up and down…you MUST have a plan in place before it happens as you MUST know it is GOING to happen!
OK, let’s get back to the market action. The S&P 500 finished the week up 2.86% by Friday’s close. Although it was a good week for the bulls, they absolutely have work to do before creating a bullish price environment on the weekly time scale.
The last day of trading for 2018 is today…a big day since we get all the monthly momentum readings. The readings will more than likely be bearish as I can’t imagine one day of price action will change their current negative standing. This causes great pause for the continuing bull market and confirms this is a time to remain cautious.
Of course, this doesn’t mean it’s all over! The plan is to continue looking for opportunities, but to sell the rallies rather than build US equity positions right now. Right now, Santa’s bullish deliver is a little to late to bring hope to a bullish market structure. So, when it comes to getting a little more bullish on US equities, we are waiting for a test of the lower levels we saw Christmas Eve. Price doesn’t have to get down to those levels, but we are looking for at least an attempt by the bears. If there is one thing I want to tell you…Happy New Year! I’m looking forward to a great year and I hope you have the plans and the discipline to make 2019 your best year ever!