Santa Claus Taking a Breather...

Santa Claus Rally breaks today as the Dow closes sideways by 1 point, ending the 6 days winning streak.

As expected, the Nasdaq composite started to ease off a little today due to extreme short term overbought condition and has put pressure across the board. Clearly, the market has come to the end of yet another mini rally and needs to ease off a little before it can find the energy to go on higher. The Santa Claus rally has worked well this year and the optimism created should prevent any strong retreat before New Year is over. However, that didn't stop me from taking profit on some of my profitable trades today.

As for the Dow, its not strange to see it revisit its 30MA which is about 10,400 within the next few trading days. This recent "sneak out" of its short term neutral channel did not produce the kind of momentum needed to call a break out and is also what kept it in short term neutral trend in my classifications below.

For now, the Dow remains in short term neutral trend within an intermediate and long term bull trend.