SPX challenged its trio of resistances this afternoon. The Intermediate-term was the last to be challenged at 2064.18. The 50-day was at 2063.14 and the 200-day (not shown) is at 2061.50. A decline beneath that final level appears to have put SPX back on a sell signal.

SPX has now reached breakeven with the December 31. 2014 close at 2058.90. What comes next?

They have made this low volume, low breadth Santa Rally, not on the FANGS, but on oversold Oil stocks!

I have never seen so many trendlines ignored by the market as I have in the past year. VIX is another case in point. It is off its buy signal by dropping beneath its daily mid-cycle support at 16.76.

A cross above the trendline would do a lot to repair that damage.

The question is, can the market hold this level for another week?

By the way, retail investors may not be the people providing his market liquidity. Bloomberg reports, “Investors pulled more money from U.S. mutual funds last week than they have in any seven-day period in the past two and a half years.

Net redemptions reached $28.6 billion in the week ended Dec. 16, according to a statement from the Investment Company Institute, a trade group. It was the biggest weekly outflow since June 2013, ICI data show.”

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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