From Dow Jones & Company:

As traders deferred selling until the new year, the S&P 500 sold off sharply at the start of 2024, indicating that there was serious internal deterioration in the market. The market was bullish as long as it stayed above 4600, but a breakdown below that level would be a major negative development. The market is subject to whipsaws, and therefore solid confirmation of new sell signals is important. While implied volatility indicators remain less bearish, the realized volatility of the SPX is increasing, which is generally a bad sign for stocks. Since the typical Santa Claus Rally period saw a loss this year, it could be a problem for stocks in the short term. The Santa Claus seasonal period produced a loss only 13 times since 1969.

The buy recommendation is a SPY put with a striking price 20 points lower for any position. A confirmed MVB sell signal has been generated, along with a HV20 sell signal. The Santa Claus Rally hasn’t been successful this year.

All stops are mental closing stops unless noted otherwise. We will keep observing the seasonal period and take action if needed.



Read more: Opinion: Santa didn’t come to Wall Street and stocks now face rough sledding