- The rally so far this week has been steep and we are immediate-term overextended in equities an most risk assets for that matter.
- Our game plan remains to be short some SPY for bucket 2 in the immediate term while looking for buyable levels near the 1200-1230 area on the S&P 500 for a continuation of the Santa spark higher.
- Once/if we get into the 1200-1230 area we need to keep a close eye on how things hold up…we will look for marke breadth, sector action, and candles on 5 minute and daily charts.
- The German Dax, which we use as a reference for global risk appetite currently…is forming a bear flag, albeit a fairly large one. We will watch for a potential break down and out of it, or even for a break to the top of it (less likely).
Bear flag in copper?
Lululemon (LULU) has good support near the $42 mark, but note the series of lower lows made since June. Fundamentally speaking the firm is still trading at high multiples. We are interested in a Bucket 2 short below the support zone.