Special Risk Capital Management LLC

Volitile Bottom (?) looking for a Bounce December 29, 2018

Dec. 28, 2018 – The last post of the year and wow, what a week.  Massive moves inter and intraday.  I understand that we had a nice rally after Christmas but so much damage has been done on the way down that the light buying volume has not made up for it.  I’m still looking for a “head fake” rally to around the 6930 level (green dashed line) then likely a big move lower, but let’s take this one step at a time.  There’s always a possibility that we just chop around between these Resistance and Support levels and build a base.
All of the indicators shown above remain Bearish except for Price Strength which is neutral.  I don’t think we’ve seen the true market here due to the end of the year portfolio rebalancing from bonds to stocks by big pension funds and institutions.  Also there has been a fair amount of short covering (buying back stocks that traders shorted a month ago).

Price Strength of stocks in the S&P 1500 Index has improved but is still predominately “red”.

The Accumulation / Distribution pie chart hasn’t changed much from last week; it moves slower and the volume last week was very light.  The table below shows the very short term sector strength.
For the time being I’m happy to be mostly in Cash &/or hedged out.  Let’s see what the new year brings and maybe the markets will show their hand.

Happy New Year to All !            ………..  Tom  ………

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.