Look at this S&P 500 chart:

spx triangle

I’m not a chartist, but it looks like a triangle to me, which will come to the breakout point 5-7 trading days from now.

Which way it will break-out? Well, based on fundamentals you know which 🙂 But let stick with charts.

spx 150 dma

Here I’ve made you a very nice 150 days moving average (thick blue line) shifted back by 76 days. It fits nicely with the last 2 years action and making a nice round top back in July.

So I think $SPX will break down in early/mid January and fall down. The equilibrium point in the following 2-3 months will be a zone between 1360 and 1460. The 1360 is a nice 8% drop from current level.

Myself, I do not plan to short $SPX, it’s more a benchmark than real position. For example, Russell 2k is much weaker as it doesn’t have big oil and pharma corporations that are looking attractive. When S&P 500 goes down everything goes down, especially what has to go down 🙂