Second: Some analysis.
I continue to see this move as bullish for several reasons.
1) The daily chart setup continues to be valid
I am referring to this study: Dec 8 - Daily Cycles, Looking for an Edge. This setup continues to be valid and the last 3 days has made the setup appear to be more likely on my daily indicators
2) 60-min statistics are very compelling
As I said on Tuesday a 60-min buy was issued. Today I got a confirming signal from one of my secondary indicators. And this has happened in a very specific way. I ran a study on my cycle system and since 2001 there have been 67 similar setups and 93% of them led to higher highs (typically several percent higher). Again, these are stats not predictions, but it is a very compelling stat.
3) Very bullish seasonality for not only the week before Christmas but especially the week after
See: http://www.bespokeinvest.com/thinkbig/2011/12/23/market-performance-during-the-last-week-of-the-year.html
4) Closed above the 200 day MA
This is a nice confirmation for point 1 above and a bullish way to end the day before the Christmas stock market break.
5) Closed above the downtrend line
The downtrend line that the market has been unable to breach for the last 5 months was finally surmounted today. And that's not bearish.
Third: Some eggnog ... with a very healthy shot of whisky. Time to start drinking :) Happy Holidays!
