By Lawrence G. McMillan, MarketWatch
The stock market is struggling to remain positive during the traditional “Santa Claus rally” period, which began with last Wednesday’s close — with the S&P 500 (SPX) at 2061. So far it is up a net of about 2 points, with a big gain Tuesday, but a sizeable loss Wednesday. As we have pointed out previously, Yale Hirsch — the inventor of the “Santa Claus rally” system — says, “If Santa Claus should fail to call, bears may come to Broad and Wall.” The seasonal period runs through next Tuesday, Jan. 5.
The SPX chart is still in a downtrend (see accompanying graph), because of the pattern of lower highs and lower lows. The Index would have to exceed near-term resistance at 2080 as well as resistance at 2100 in order to change that fact. The 20-day moving average continues to decline. There is support in the general area near 2000.