Green for equities, red deferred as Santa holds Grinch at bay - for now

Green and red are traditional holiday colors - and today, green was all over most financial markets, while red only showed up in the volatility index, Treasury bonds and notes (and TLT, the 20-year bond ETF). The Santa rally in equities, gold, oil, euro and yen, managed to overcome some cycle resistance marked by some cycles analysts, to rise as indicated for the weekly cycle forecast (thanks ChartsEdge) and ring the bell at SPX 1122, its 50% retrace to the 2007 highs! The actual high today was a bit over which is common, an overshoot just as the QQQQ continued well past their own 61.8% retrace (back at $43.30) to tickle toward the $46 that Andre Gratian has identified in his weekly updates here. So if you were feeling Grinch-y, you had to give way as the rally rolled over such feelings. Does it mean the markets have pushed aside the bear market? No - just deferred until after the holidays.

VIX watchers probably noted that the VIX didn't really drop today, just an intraday poke to another low and then close off that low. Although I hold out the possibility we may see it tag 16.91 before the markets turn, probably in mid-January. And the SentimenTrader gauge (shown below as of yesterday's close) must have edged even closer to that level that says, the crowd is getting overly optimistic!

But let optimism prevail. After all, 'tis the season! So ENJOY! Remember, trading is for your good life (not vice versa) - so get out there and enjoy your loved ones. Make some cheer! Happy holidays!!