The new all-time highs came with strong volume on Wednesday, but alas, the selling volume on Friday overtook this volume showing that the bears continue to growl stronger. This behavior where selling volume is greater after each mini-peak represents distribution occurring, where the larger funds are handing off the long stocks to Ma and Pa Kettle who are always the sucka's that show up too late and end up holding the bag. The media pundits, and Fed, continue to cheer lead the markets. None of them see any asset bubbles and the daily mantra is buy, buy, buy. Joe Retail already took all his Christmas money and bot TWTR, NFLX, WYNN, GOOG and FB stock, as well as the broad market, dividend stocks, high-yield investments and biotechs (the latter four are plump asset bubbles despite what you are told), following through on the recommendations from television personalities. Three strong distribution days occurred over the last nine trading days. Do not be the one without a chair when the music stops--the band is already starting to sputter and play off key.
For Tuesday, which begins the 4-day holiday-shortened trading week, with the SPX starting at 1839, the bulls need to punch up through 1846, and an upside acceleration will quickly test the all-time high at 1851. The bears need to push under 1835, only about three points lower, to accelerate the downside which will seek out 1818-1824 in short order. A move through 1836-1845 is sideways action to begin the week. Serious market trouble would occur if last week's low at 1816 fails since price would then seek the confluence with the 50-day and horizontal support at 1808. If that fails, the 1803 support test and sub 1800 numbers will follow along very fast.