It’ll be brief this evening as there is absolutely nothing to add from yesterday’s action. Today was a classic low-volume retail day that didn’t add up to much in terms of gains, but did do the usual upward move. Big money is gone and, thus, the trading is very thin with stocks making mostly small moves in either direction, most of them a bit higher. With tomorrow a holiday, and Friday a half day, expect nothing the rest of this week in terms of importance technically.

The real action begins on Monday of next week when the big money returns and the market fights at key levels of resistance. You could probably not show up on Friday and you wouldn’t miss anything important unless something happens tomorrow regarding the fiscal cliff. Knowing these politicians, they’re already on vacation and wouldn’t give up a minute of it for the good of the people they serve. Summing up today, we saw small gains on very light retail volume, exactly as one would expect.

The real action starts Monday in earnest as the bulls and bears are at a real inflection point in this attempted rally off very oversold conditions on the daily charts that are now nicely starting to unwind back up. They are now more neutral than oversold, but it feels as if the market could use a bit higher first, although that’s no guarantee in this environment. The S&P 500 would seem to want to test the 50-day exponential moving average at 1409, but first it must clear the 20-day exponential moving average currently at 1394.

If that does clear, we should test to 1409, but getting beyond 1409, again, if we get there, will be very difficult as the bears will press on the sell button at that area of resistance. You don’t think about shorting until you see the topping stick, which would likely be a gap up failure as the day moves along. It doesn’t have to happen that way at all, but that’s the safest time to enter a short position or two. Slow and easy until we see that stick printed on the key index daily charts.

Have a great Thanksgiving Day holiday.

Peace,

Jack