1/2/2014

While I expected declines in the near term, I did not expect them today. Luckily, when I saw that S&P 500 futures were below 1840 this morning I leaned heavily toward short positions.

Declines at this stage should not really surprise anyone as there are signals of the market being overbought, as well as some trend channels that have very long term significance. Tomorrow looks set to be another red day, considering the oscillators appear to be in mid jump on the daily and weekly charts. Also, this could be a bull flag forming on the daily and weekly, in which case it would merit more than one day. Not to mention, it's completely feasible to envision this short trading week to turn red with 2 out of the 4 days seeing sell pressure.

Who knows, I could be biased.

Getting close to 1800 tomorrow - which is where support is on the tentative trend line from the October lows - is a bit of a stretch. The lower Bollinger Band is at around 1805 and there are a few fib levels to hit before 1800. As I have recently pointed out though, this market is overbought in the short term for sure. 

S&P 500 30 Minute Chart

S&P 500 Daily Chart

S&P 500 Weekly Chart