US Equities: 6 Things To Watch In The Days Ahead

It’s been a relatively quiet holiday season for US Equities. But some interesting technical events are taking place that I’d like to highlight and discuss. Some bullish, some bearish.

Here are 6 things to watch over the coming days.

Bullish

1.  First and foremost, the Russell 2000 (RUT), S&P 500 (SPX – Quote), and NASDAQ Composite (COMPQ) have broken out to new highs. The Russell 2000 is probably the most interesting, as it has struggled in a sideways range all year… so a breakout to new highs is noteworthy. All of the breakouts on the US Equities indexes (including the Dow Jones Industrial Average) are marginal, on low volume, and have yet to receive confirmation.

2.  We are also still in the “Santa Clause” rally phase (until Jan 5).

3.  All 4 Indexes mentioned above have rising 50 day moving averages (and these should serve as a barometer of market support into January).

That’s all fine and dandy, but now there are a few near-term concerns that investors/traders should be aware of…

Bearish

4.  The S&P 500 is on bar 8 of a 9 daily sell setup and the Russell 2000 is on bar 9. These are very short-term trading setups, but with the breakouts being razor thin, traders will want to monitor to see if the market gets a reaction lower.

5.  Daily RSI divergences have formed on each of the major US Equities indexes listed above.

6.  The Utilities are leading! What?!?  (Be sure to read fellow SIM contributor Aaron Jackson’s post on Utilities here)

So the table is set. Perhaps we get a bit more of Santa to my first S&P 500 target (2108). BUT the bears are nearing a short-term window of opportunity into early January. If the market holds up, that would be bullish… what will the bears do with the opportunity? Stay tuned.

S&P 500 Daily Chart

Russell 2000 Daily Chart – 2014

Thanks for reading. And trade safe.

Follow Andrew on Twitter:  @andrewnyquist

The author carries both long and short trading exposure to S&P 500 related securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.