With that said, we just rallied up 21% in one week, on relatively light volume by the holiday shortened week. We will pullback this week. The question is how much of the most recent advance will the market retrace? I would expect us to come down to the 850s at the very least to test support. I tend to think we may have seen the lows for the year but who the hell knows. Just saying that I see a bullish falling wedge on the chart and cannot ignore this. Also the weekly and daily RSI is showing positive divergence on the SPX and this is a very telling signal that we could climb higher from here.
Economic data coming out this week includes Monday's Construction Spending and ISM Index. Tuesday is Auto and Truck Sales. Wednesday we get ADP employment, Productivity, ISM services, and the Fed Beige Book. Thursday is the all important Initial Claims and Factory Orders. Finally on Friday we see November Jobs data.
All in all it will be a interesting week to see how the market reacts to higher volume and more data. The charts are at a decision point. We are at 900ish and could run up to 920 quickly or selloff and retrace some of the recent rally. I'd bet on the latter to begin the week at least. We shall see how the week unfolds.