Consequently, if the SPX busts above the 1,007 neckline, it will be 159-point move from the closing horizontal support of 848. Simple math dictates 1,166 could be the next measured move once 1,007 is broken. Interestingly enough, this equates to the converging resistance just mentioned.

With that being said, there are a lot of politics, economics and fundamentals controlling the daily action of the equity markets. And as you have seen throughout this fourth quarter, anything can happen. So by no means does this imply you should go and buy blindly. To paraphrase our friend and fellow Minyanville writer Jeff Macke on last night’s CNBC’s Fast Money, “This is a market of stocks, not just a stock market, and this rally should be used as a trade, not a long-term investment.”

Just to give you a glimpse of the increase in risk/volatility since the last recession and market downturn (2000-2003), take a look at the next chart. This is the SPX from the March 12, 2003 low of 800 to the January 26, 2004 high of 1,150. This depicts a 40%+ move off the lows - and took 10 months and 14 days to accomplish.


Click to enlarge.

With the volatility we’re experiencing of late, a move of this magnitude has the potential to do it in a fifth of the time. Nevertheless, this does not mean all good news. With volatility this high, combined with global political, economic and fundamental uncertainty, investors should expect continued whipsaws and intimidating times ahead. The 2 levels to be concerned about, for all Four Sisters, are listed here, and represent the most recent support and resistance points.