Back to Resistance

• Posted by Robert Sinn
• on December 22nd, 2011

Equities have staged an impressive “Christmas/Santa Rally” since Monday’s short lived sell-off – the S&P 500 ($SPY $SPX) is up nearly 3% for the week and the Russell 2000 ($IWM $RUT) is higher by 3.4%. I wrote in my weekly letter that based on the recent evidence the market has provided us, 1160-1260 is a fair range for the foreseeable future. However, we are now at the upper end of this range with the same important layer of resistance and confluence of the 200-day SMA and a 6-month downtrend line just above:

 

Market Anthropology posted an interesting chart of the $SPX showing an overbought rising wedge (bearish) on the 60-minute time frame:

 

Finally, Corey Rosenbloom highlighted yet another symmetrical triangle being formed by the S&P 500 – Corey believes that either of his targets, 1160 or 1300, could be achieved quickly once the triangle is resolved.

Will Santa be able to drive the market up through resistance or will we fall back down into the middle of the range again?

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