Weekend Thread

SPX Daily

Momo has definitely shifted to the downside. SPX closed on the 50day SMA at 1433ish.... and 1400-1410 seems inevitable. Equity index futures closed out right on the lows, and the S&P's traded the highest daily volume of the December contract. Sentimentrader short term indicators look ripe for buying, but daily chart indicators still have room for selling on S&P futures. This setup is suggesting a potential gap down Monday.

I just flipped through the COT reports released this afternoon and commercials have added to S&P shorts (now very heavy net short), reduced Naz shorts a little (still heavy net short), and are heavy net long VIX futures. They are also heavy net short Dow and Russell futures. Since we are starting to see momentum pickup on the downside, I think it's worth noting that these positions have been building to extreme levels for months. I'm starting to think we are putting in a major long term top here... and will say the same thing I've said the other times I posted about COT data: please be careful on the long side and honor your stops.