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Is Santa Bringing Coal for the Bulls or the Bears?


The market remains poised at an inflection point, and what happens next could have far-reaching implications for the market.

MINYANVILLE ORIGINAL Christmas Eve has arrived, and now the question is: who's going to get coal in their stockings? The bulls and the bears have both held the key levels they needed to, in order to create maximum confusion over who will own the longer-term. I have remained intermediate bullish since November -- and still continue to slightly favor the bulls for the time being -- but this is an important inflection point, and I'm prepared to switch footing if the market dictates.

The first key levels I'm watching are 1411 in the S&P 500 (INDEXSP:.INX) and 13010 in the Dow Jones Industrials (INDEXDJX:.DJI). Sustained trade beneath those levels would leave the market vulnerable to a larger decline.

I've drawn up a lot of charts for this update, so we're going to get right into it.

The first chart I'd like to share compares the SPX, the German DAX, and the London FTSE. These European markets are one of several reasons I continue to give a slight edge to the bulls on this side of the pond.

Click to enlarge

Next is the SPX bull count, which is facing a test, especially since my mid-term target of 1445-1455 was reached and the market immediately reversed lower. Bulls need to claim that resistance zone in order to clear the way for new multi-year highs. At this point in the wave structure, trade above 1448 should lead to a very bullish resolution.

Click to enlarge
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No positions in stocks mentioned.
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