December Seasonality
From all appearances, SPY made a pivot high on Thursday. Price action has turned higher in the pre-market session. Note a (-1%) pullback from recent highs (267.56 > 264.86 PM). The Thursday session pullback was inevitable and avoidable, as we continue to repeat every day in the live broadcast.
TICK cumulative in the lower panel continues to exhibit bearish divergence that we will be monitoring in the coming days. A sudden change in character would be seen as bullish only if it turns and moves back above its signal line. Remaining below would signal more downside potential. Since this is “real-time” institutional sentiment, TICK tells us exactly what fund managers are doing.
SPY Block Trades
it is important to note that there is still sizeable block trades acting as support below current levels. SPY (264.79 +/-) low in the pre-market session remains near blocks (265.00 ~ 265.50). These block size trades are support until otherwise noted.
NDX Cycle
Technology has been tracing out a pattern of distribution over the past twelve (12) trading days. Currently, we see potential for a double top, while the cycle shows signs that it might turn higher. It is the latter scenario that has us cautionary. We aren’t loading up on technology unless this indicator confirms by turning up with price action.
We started taking profits off the table this week, as noted in the Live broadcast. We also sent out alerts to that effect and updated out thoughts on the BLOG. We don’t see a reason to be alarmed. We are just raising cash and selling into strength, to get ready for whatever comes next. The Christmas holiday is approaching as well, so keep it light.
As always,
Happy Trading,
Vinny