E-minis set new high last night to catch up with everyone else. The RUT finally caught up with everyone else in new high land. After lagging horribly coming into December, down the stretch they came after turn four and RUT hit the turbo boost and appears to want to pass everyone in the final quarter mile. The consensus appears to want everyone to end the year in high style.
Looking at SPX compared to the dollar, oil, TNX and gold here. SPX holds it range and its high as everything else appears to be making the necessary adjustments to their unrealistic conditions.
The VIX daily decided to (not surprisingly) set a new low yesterday. I'm not really sure what to say other than the fear index is not accurately describing the fear that should be evident. IMO this chart best describes the fantasy land scenario we are experiencing now. Combine this with the overall bullish sentiment and you get the recipe for the much anticipated impending correction.
I have no idea what to expect or to call at this time with the SPX range bound, slightly setting a new high yesterday (my upper range all along was 1050 to 1121), meeting resistance at the upper BB and the daily RSI not making any decisive moves. I'm on the sidelines and enjoying the holidays. I'm not ruling out the possibility of anything up or down right now. I'm seeing counts that have tops set or being set and some with a good bit of upside to them. I don't trust any of the counts right now (I don't trust anything right now actually). My suggestion is to wait for the market to come to you. If there is a decisive break north, then 1214 is my target area. If there is a decisive break down, let's watch the form and see what it has to offer. I'm sticking to my call all along that it will take an "external event" to rip this market from Ben, Timmuhh and the gang. Will a big hedge fund or some mutual funds blink before year end in this game of high stakes chicken they are playing or will they take this thru the first quarter earnings period?
Happy holidays and good luck.
