Santa Stays Away

Santa may not arrive on Wall Street after all this year. Several important indices in the tech sector broke decisively below lower support levels. The S&P and Dow threaten to follow. Follow through is always important, but we may find that the market is offering some short swing trades this week. Keep in mind that a pull back here does not destroy the longer term outlook for a continuation of the strong bullish move begun in October. Taking a look at the QQQQ you will notice that after the weekly breakout in early November, the price has now been turned back by upper channel resistance. There are two points where the price can now find support, depending on how determined sellers are. Minor support can be found at the pivot point towards the center of the channel, roughly just below yesterday's close. More likely however the price will track back to the $40 area where the major trend is. The latter is a more likely scenario and one which should produce some intermediate shorting plays.

It's a rare thing to not experience the Santa rally, but as everyone should know by now, the market does experience anomalies and it is better to expect the unexpected than to rigidly hold onto your original bias.