Chart of the day

Where do we stand fundamentally?

The S&P 500, tracked by $SPY, saw gains in the pre-Christmas trading session on December 23, 2024, with the index rising by 0.73%. This was largely driven by strong performances from mega-cap technology companies like Broadcom, Nvidia, and Tesla, contributing to what's traditionally known as the 'Santa rally'. However, not all sectors performed equally, with technology and communication services leading while consumer staples and materials lagged behind. The market was expected to have lighter trading volumes due to the holiday season, with an early closure for Christmas Eve.

SPY is retesting the previously broken downside resistance of 595. An extension lower from that level can lead to a test of 550. My KNOWPO trading system indicates a good low-risk short trade here, so I expect a reversal downside as we have reached the fifth upside short-term wave. The medium-term target should be 420-450.

A break above 610 will invalidate the downside reversal and lead to a higher extension. A break below 570 will accelerate the downside reversal.

_{You can take a short trade entry with a stop loss above 610 to target 545.}