[Chart courtesy of MarketWatch.com]
- Moving the markets
An early follow through to the upside from yesterday’s rebound ran into resistance quickly, as traders were more comfortable adopting the mantra “let’s sell the rip” rather than believing the rally had substance to it.
The Dow and the S&P 500 surrendered all gains and closed in the red with the Nasdaq barely hanging on to the plus side. Opinions vary widely these days about the Santa Claus rally with one analyst referring to it as a “violent and crushing move higher” taking shape this month.
While that is certainly possible, but maybe not probable, the question in my mind remains whether that would be just another bear-market blow-off, or an actual break back into bullish territory. I guess we’ll have to wait for the answer.
The news headlines were the same in today’s choppy session. Optimism around US/China trade talks faded in a hurry with market momentum losing even more steam on Trump’s threat of a government shutdown, as border-wall funding talks with Democratic leaders turned into a nothing burger.
Markets hate uncertainty the most, and that’s why we ended up at the unchanged line. For the time being, our bearish view remains alive and well with our Trend Tracking Indexes (section 3) continue to be positioned below their respective trend lines.