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Technically, Wednesday’s rapid About-face is a short-term negative and represents the beginning of a short-term decline following nine straight days of gains for SPX. Pullbacks into Friday of this week and/or next Tuesday (post the Christmas holiday) likely should prove buyable for a move back to exceed SPX 4818. Overall, this quick reversal of the big surge in US Equities should be buyable, but will require a bit more time.

The quickness of this holiday reversal for US stocks isn’t all that unusual given the lower volume period that accompanies most holiday trading. Moreover, after nine straight days of gains which had lifted SPX momentum to the highest overbought readings since January 2018 (per Daily RSI) a decline certainly shouldn’t have been ruled out, specifically given SPX, QQQ and also IWM having traded up to prior peaks.

As mentioned over the last week, neither SPX, nor QQQ, had successfully achieved a weekly close back above all-time intra-week highs (SPX-4818.63, QQQ-408.71) and IWM had failed to successfully make a weekly close above $200.

As mentioned, this current week represents typically the worst seasonal period normally for December in pre-election years, and consolidation following our ...

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