Has the S&P found support?
Each of the lead indices have their own support levels to defend, not all tested at the same time. On Friday, it was the Nasdaq toying with potential trading range support, today it's the turn of the S&P. These support levels I'm looking at are not major areas of demand, but a guide as to *where* demand might kick in.
So with that, we have the S&P which is down testing neckline support from October with technicals net bearish, but not oversold. Price trumps technicals, so even given the weak technical picture there is a good chance we could see a bounce tomorrow - an aggressive long trade.
The Dow Jones Industrial average is successfully testing its 50-day MA. This is another buying opportunity, building off the bullish trend change with the 'golden cross' between the 50-day and 200-day MA.
The Nasdaq undercut a support level, leaving it staring at a move back to the October low. Technicals are not fully oversold but they are net bearish. The index is also underperforming relative to its peers, so it may be slow to get going.
The Russell 2000 is also trading just below support on net bearish technicals, but this index is oversold. A close above this support would confirm a 'bear trap' and set up a nice play back to $188.
For tomorrow, today's narrow bullish finish does offer a decent risk:reward (using a stop below today's lows) for a long trade to play into a potential Santa rally. Next year might be a different story, but you might as well enjoy the now.
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Investments are held in a pension fund on a buy-and-hold strategy.
