12.20.2011 -- Santa showed up...

Looks like the market finally decided it wanted a Santa rally to close out the year and window dress the quarter.

Quite a big up day for little news and equities definitely decoupled about halfway through the day from the EUR/USD and Gold. Oil and the 10 year yield tried to keep up, but equities were just on a mission of their own.

We will analyze what today meant in todays chart.

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Key Levels

Upside -- 1248, 1262, 1310

Downside -- 1230, 1216, 1203, 1196, 1121

(just like that.. we are getting lopsided to the downside already)

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SPX Daily;

So here we have the result of today.

While we took out a couple of overhead resistance areas, we didn't take out anything significant except the 50dma. Thats probably why the market was able to produce such a large rally.

We appear to have closed below or right at our previous channel and we are still right in the middle of the large narrowing wedge.

I've outlined where I think the market might be heading between now and say middle/end of January.

I think we'll headfake out of the top of the large wedge and then proceed to plummet.

I do though think that they will be able to thrust this up into the end of the month after a bit of pullback from today.

Middle of January is going to be a very prime opportunity to short this market.

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Oracle missed earnings pretty badly and was down 8% or so AH. That will weigh on tech stocks tomorrow if the market had any grand ideas of a big follow up rally. Although, you would have thought the vote down of the pay roll tax extension would have at least blipped the market today, but it did not. Everyone just hit the buy button on the computers and went to the mall today.

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As a side note.. I am expecting my 2nd child soon, so I may suddenly disappear from posting at some point here soon. Once that happens, I will be removed from posting and the markets for about 2 weeks or so. So, don't worry, i'm not dead or anything, I'll be back. ;)

GL

CJ