This one will be a quickie. The minor run-up in the market so far in Dec. has not yet
been strong enough to offer much to get excited about. The rally came off a mild oversold
and is encountering resistance at a mild short term overbought level. A continuation of the
upleg off the Aug. EOM lows should have more upside zip than has yet been exhibited.
The SP 500, which closed today at around 1224, should have no trouble moving right on
up to the 1250 level if this is going to be a solid upleg continuation and not a head fake.
I have linked to the "500" chart below and at the bottom of the chart is a panel showing the
% of stocks within the index that are trading above their respective 200 day moving averages.
When this index tops 80%, it normally signifies a higher degree of risk in the market, although
during powerful run-ups in stock prices, the % above the 200 day m/a can remain elevated
for extended periods. Even so, players should recognize that the market's risk level has moved
up since the summer.
SP 500 chart.
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