S&P Tests The Top Of Its Trading Range

Stocks were up today across the board with the S&P testing the top of its trading range. If you look closely at the above 60 min chart of the S&P you will notice a series of higher lows. Usually higher lows are followed by higher highs which means expect the S&P to break through the top of its range.

Historically the days surrounding the Christmas holiday leading into the 2nd trading day of January have been bullish. The S&P has increased an average of 1.5 percent during the seven trading days that start with Christmas Eve and end with the first two days in January since 1950.

As you know I've been holding shorts in the stock market but have been scaling out of these positions (at a loss) ever so slowly, maybe too slow. The big disappointment for me was seeing the dollar rally over the past 3 weeks which I thought would have put pressure on stocks but that simply did not happen. Right now I have a mixed position, I'm short a few financials that have been weak and long several stocks that have been holding up well. This was not an easy month of trading and I think the above sideways chart says it all!