No Sign of Santa

All bulls had to do yesterday was hold on to most of their gains from the previous day, but they couldn't do it. By the end of the day all they had managed to hold onto the 5dma, so there is at least no 5dma Three Day Rule target back at a retest of 1993. Unless bulls can reverse yesterday's reversal candle today though, the fail yesterday confirms the downtrend, and there is still no sign of that Santa Rally. 

Props to my charting partner Stan at theartofchart.net, who called in his Wednesday night video for a mid-2070s high and then the start of a new leg down that might go as low as 1940. That leg down may well obviously be in progress now. If you are interested in seeing these nightly videos then I'll mention that there is a discount promotion through Christmas on all annual memberships, and if you're interested you can see that here. 

SPX daily chart:

If bulls are going to have a decent chance of reversing back up here, then their first priority is to recover back over the 50 hour middle band, currently at 2043. I'm thinking we may well see a test of that today and whether the bulls can convert that back to support most likely determines the next move. Unless we see a break back up I now have a falling channel, established at the high yesterday, and the next obvious target is at channel support in the 1970-80 area. SPX 60min chart:

This is odd action for December, which tends to be bullish on low volume. As we go into next week we should start to see less interesting tape as volume dries up hard into the holiday. That would normally result in dull bullish leaning tape, but perhaps it might be dull and bearish this year.

I wrote a post on the first trading day of February talking about the stats I had worked up on the bearish action in January this year. You can see that post here. I was saying then that historically the best performing comparable years had been up 1% and 3%, so the best likely outcome for SPX in 2015 was flat to slightly up. The closing print for 2014 was 2058.90 and the best case 3% up would see SPX closing the year in the 2120 area. That is starting to look overambitious now. We'll see how it goes.

I'm taking the whole of next week off so my next post will be on Monday 28th December. Everyone have a great holiday :-)