4 THINGS THE BULLS WOULD ABSOLUTELY HATE TO SEE GOING FORWARD
Now that I've spoken about what the market should do going forward, let's talk about what the market absolutely, unequivocally should not do:
1. A move below 1235 on the S&P 500 will be a warning signal. A close below 1235 on the S&P 500 will be a very strong warning signal.
2. A gap up tomorrow that reverses back below the upside trajectory line in this chart will be a strong warning signal.
3. A sideways consolidation lasting the remainder of the week and preferring to remain beneath 1240 is a sign of weakness.
4. A strong reversal off of the downside trajectory and 200 day moving average on the S&P 500 could yield to another break into counterfeit territory.
You have to think about this way: The market, as of this moment, has caught the Christmas rally crew off guard by once again gapping up and putting together a strong trend day forcing shorts and potential longs to chase the market up. If the Christmas rally has legs, it will continue the practice of forced chasing without allowing participants the opportunity to get long at a discount.
A generous market that seems accommodating to all of those who missed out on this rally today should be held in deep suspicion.
