Good afternoon and welcome to the new year. The market on Friday continued to show remarkable resilience. We did get a bit of selling pressure near the end of the day, but that was quickly negated as the spoos went out at session highs, 15minutes after the official close for the cash market. Purely from a short term technical perspective, all indications to me are that we’re going higher early in January. Thus far there is no price action which acts as evidence to the contrary. If you think you see something worrisome, it’s probably just your negative bias manifesting itself. Been there, done that.

Looking at this coming week, we might be in store for a formidable spike. I see a lot of bears licking their chops right now, and they may need to get blown out of the water again before we can sell down. Let’s watch the $VIX for clues. If we get sustained activity above $18, there’s sufficient reason to be cautious. However, if we instead see this measure get turned back away from the $18 level again, our game of musical chairs will continue.

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