Yesterday was a pretty dull day, with most of the action in the final 30 minutes of trading. The S&P 500 finished down 30 bps, while the QQQ (NASDAQ:QQQ) also finished down by 30 bps. The S&P 500 almost broke support today at 4,780, but not by enough to make me feel comfortable about it. Once 4,780 breaks, which I think is highly likely, we should move back to the 4,740 level and erase Monday’s gain.
Ideally, I’d like to see the index close below 4,740 either today or early next week. It would be a rejection of the new high and confirmation of all the other patterns I see across the marketplace.
Dow Jones
The Dow Jones today made a classic 2B topping pattern with a new closing high, and attempt to take out the old Intraday high and then a close lower and more importantly below the previous all time high. If we get a sharp decline tomorrow I think it will seal the 2b topping pattern and result in the Santa rally vanishing next week, before the Santa rally is officially over.
Nasdaq (QQQ)
Nasdaq 100 Futures failed to break above 16,560 today and closed just below support at 16,450. The fact that the NASDAQ is failing is critical, and that likely means some follow through lower tomorrow will also set up a sharper decline. The RSI is very negative.
APPLE
The same thing still remains true across a number of mega-cap stocks, with Apple (NASDAQ:AAPL) still unable to make a new high today, and trading lower. A drop to support at $167 would set up a potential double pattern, and the RSI has now fallen below an uptrend.
United Health (UNH)
More important for the Dow than any other index is UnitedHealth (NYSE:UNH) and that the stock has a giant rising wedge pattern that has formed, and with a giant gap to fill at $403, this needs to be watched very closely.
AMD
Advanced Micro Devices (NASDAQ:AMD) now appears to be in a downtrend and appears to be on its way to $135. As for the Xilinix the company noted today that it was not going to close until the first quarter. After owning NXPI through the whole QCOM attempted takeover, all I can say is good luck trying to get China to approve the deal. Maybe China will do what it did QCOM, which was never blocking the deal, but to never approve it either.
