So now we're left to wonder whether or not we're going to get a Santa Claus rally and if so, from what level will it start.
The bounce pattern off the November 16th low, which looks like a correction to the October-November decline, may have completed today, in which case we could see the market start back down from here.
A Santa Claus rally (typically between Christmas and New Year's and the first few days of January) might start from a much lower level.
Key Levels for DOW:
-bullish above 13,400
-bearish below 13,100
An early bearish signal would be a drop below Monday afternoon's low near 13160.
There is an important Gann Square of Nine turn date this Friday, December 14th. If you're at all familiar with this chart, December 14th is 90 degrees in time from the September 14th high and on the same vector as SPX 1430. SPX 1430 also is 6 squares up from the March 2009 low and therefore from a Gann perspective, December 14th and SPX 1430 is a very important time/price square-out.
In addition to the December 14th Gann turn date there is a new moon today, December 13th.
SPX - The inability to hold above the price-level resistance zone at 1429-1434 for the past two days, along with Yesterday's gravestone doji, leaves one wondering if today's high was it.
A break much below 1420 would have one thinking we're not going to get a new high. Much above 1450 and I'd be thinking higher highs into January
Key Levels for SPX:
-bullish above 1435
-bearish below 1398
The banking index, BKX, came close to achieving the price projection at 50.29 for two equal legs up from November 16th, with a high of 50.18 today. It was unable to hold the break above its downtrend line from 2010-2011, currently near 49.84 (log price scale) and today's candle is a shooting star at resistance. As with the other indexes, a red candle on Thursday would be a confirmed reversal pattern. It has slightly more upside potential to the top of its up-channel, near 50.60. so even though it would be potentially bullish above 50.30 I'd be careful about a head-fake break to the upside.
Not my chart;