On the last two days of 2014, trends that have been in place this year remain in place. U.S. equities and the dollar are rising while the euro and yen are depreciating. The downtrend in emerging equity markets (and some equity markets in the Eurozone) doesn’t show any signs of ending. Although slowing momentum in the S&P 500 leaves me with a cautious (not bearish) view of 2015 for now, this isn’t the time to trade against prevailing trends.

At the beginning of each new year, a lot of sidelined capital finds a home. As things stand, U.S. equities still appear to be the best game in town, given comparatively better economic prospects and the expected higher interest rates that will eventually come.

There’s also the possibility of a self-fulfilling prophecy, as those with the capital begin to find a home for their capital in preparation for the influx of capital they believe is coming.

We’ll see if this translates to a bump in the first week of January.

The chart below is a simple weekly chart of the S&P 500 that shows the well-defined uptrend in the S&P 500. Aside from the deeper fall in October, dips in this market to the weekly mean (20-week simple moving average) have consistently been followed by rallies to new highs. In record territory, the index doesn’t face any overhead supply.

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Good trading in 2015, everyone.