Our Last Breadth

I don’t expect that many of you are spending much time trading anymore and that you’re probably busy with last minute Christmas preparations. Now before you accuse me of forgetting about the remaining 77% of the world’s population remember that a vast majority of readers are located either in the U.S., Australia, or Western Europe. Plus we trade U.S. markets which still observe Christian holidays. And last but not least – I’m probably the least politically correct SOB you’ll ever have the misfortune of running into 

Now as today also marks my last active trading session of the year I thought I’ll treat you all to one final momo update. It’s been a month or so and a lot has happened in the interim. So let’s bring out the big guns and see if there’s more pain in store for our poor battered grizzlies:

Here we are looking at SPX breadth based on stocks trading above their 50-day SMA versus the ones trading above their 200-day SMA. And right away we can see that the ratio is back above its upper threshold near the 1.0 mark. However when looking at this chart it is important to remember that any sign of weakness in price is usually preceded by  weeks, if not months, of divergent signals. And nothing usually happen unless it drops below the 1.0 mark and stays there for a while.

A similar picture on the NYSE. Once again we are above the 1.0 mark but that frankly doesn’t mean much unless we drop back below it. And based on recent activity there is PLENTY of room left for a ride higher. ‘Tis not the season to think bearish…

More momo charts below for my intrepid subs:

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Merry Christmas!

And that is it ladies and leeches – my last post of the year. Over the past 12 months I’ve worked my butt off to not only keep us all ahead of the tape but actually banking coin during the rare moments when the getting was good. It’s been extremely exhausting to be honest and I promised myself (and my most patient/supportive wife) that I would take the last week of the year off and not spend a minute looking at charts. I’m not sure if I’ll be able to do the latter but I most certainly will follow through on the former.

Before I run: Very special thanks and my most sincere appreciation to all my subscribers who have been putting their money where they mouth is by actually supporting the blog. As your first new year resolution you may want to consider joining their ranks – the grass is greener over there 😉

Here’s me wishing all of you a very merry Christmas and a hopefully less annoying year. See you all on January 3rd (the 2nd is an NYSE holiday).