the Yuppie Pig

The Technical Tea Leaves - January 1, 2010

It's a new year, and a new chart is developing. I last posted my short term technical analysis view of the S&P500 just after Christmas. It hasn't changed much but to see how I did, check it our here.

In wrapping up the finally minutes of 2009, we got a sudden and sharp break down in the very short (5-15 minute charts) which took us back into the ranged bound box which has tombed the market for the past 6 weeks. I don't want to read much into it, right now. We'll see if there is some sort of continuation, in the first few hours of trading in 2010. It's not unreasonable for there to be some last minute selling to lock in the massive gains of 2009.

As we head into January; myself and many others are expecting volatility and volume to quickly pick up. Now that all traders/fund managers are back to zero so to speak, there will be less focus on end of year mark-ups and protection of gains. We still may see some of the January effect play out.

Here's the short term 60 minute chart as I see it today.

We have a big of a breakdown in the market in the final moments of 2009, but overall, I don't see too much to be concerned with. There doesn't appear to be any negative divergence in the MACD, the PUT-CALL ratio seems to be in the mid point of its recent range, and the vix has barely budged. The only minor red flag is that the 60,3 stochastics which have been over 80 for the past 2 weeks as the market flirted with its highs, has fallen below 80.