Today’s retrace wiped out the last two days of gains and put the S&P 500 back in the red for the year and back under the 200 day moving average. Although volume was light, it picked up over yesterday and the damage was broad. The SPY is currently under the 25% retracement of recent rally level of $125.14. After that we have the 38.2% retracement level of $124.24 which corresponds with the high from last Tuesday’s rally. I see a overwhelming number of good traders going long at the close looking for that final pop to close out the year. Italian bond auction and unemployment report tomorrow will be key and I left plenty of dry powder to deal with the unexpected. If we do rally a first target would be SPY 125.70.
BTW, excellent double bearish call by Mrkt_Rwnd last night on EtfRewindPro, thank you for the holiday present!!!
