Technical Outlook:
- S&P 500 returns to normal trading after a low volume week.
- Over the last six trading sessions, S&P 500 has coiled nicely. I expect at some point for there to be a break to the upside to challenge the rally highs and ultimately S&P 500's all-time highs.
- On SPDR S&P 500 (N:SPY), of the past six trading sessions, five of them have resulted in doji price action.
- The 5-day moving average continues to be held on a closing-price basis and offering short-term support.
- The rising trend-line off of the September lows should be a strong support level for the market should this market breakdown. Its current support level rests at 2058.
- Declining resistance off of the May highs on S&P 500 still rests at 2116.
- SPY is essentially sitting in the middle of the range that has plagued the market all year long, outside of the August/September sell-off.
- S&P 500 30 minute chart shows a great deal of coiling taking place.
- CBOE Volatility Index continues to drop by falling another 0.5% down to 15.12.
- Ultimately, I don't see this market seeing any heavy selling until it gets into the 11-12 range on VIX.
- A massive inverse head and shoulders pattern is forming on S&P 500 that is worth following. A move above 2116 area would confirm the pattern.
- Terrorist plots and events continues to cause the algos to sell the market on any mention, so that remains a significant, and completely unpredictable market risk that looms large.
- Establishing a convincing higher-high on the current rally is of high importance here, otherwise bulls risk getting trapped in consolidation for the foreseeable future.
- For twelve years straight, the market over the course of the last 30 trading days of the calendar year, has yielded a net positive gain, and thus reinforcing the concept of the "Santa Rally".
- A rate hike is expected out of December's Fed meeting. However, I still would not be surprised if the Fed backed out of raising rates yet again. They've been doing just that for years now.
My Trades:
- Sold Infinera Corporation (O:INFN) on 11/25 at $22.22 for a 5.9% gain.
- Sold Baidu Inc (O:BIDU) on 11/25 at $201.47 for a 1.1% gain.
- Did not add any additional trades to the portfolio on Friday.
- Will consider adding one to two new long position to the portfolio today, while also managing the profits on existing positions.
- 60% Long / 40% Cash
- Remain long: Microsoft Corporation (O:MSFT) at $53.88, Facebook Inc (O:FB) at $104.85, Tesoro Corporation (N:TSO) at $113.98, A at $39.66, and two additional trades.
