In spite of election challenges, unemployment news, and a global sense of unease about food and housing security, the markets have continued to churn upward at a very bullish clip.
The certification of election results, coupled with the distribution of a Covid-19 vaccine are continuing to fuel bullish momentum.
And Wall Street continues to be optimistic, citing strong 4th quarter numbers and a positive outlook going forward. "I do think we hit rock bottom , and we're growing", said JP Morgan Chase's Jaime Dimon at a virtual teleconference.
From a technical standpoint however, the markets have been very "toppy".
The emini S&P 500 Futures have been travelling aggressively above the T-Line (8 EMA), shown in purple. Price moved down to the T-Line on December 9, and broke below the T-Line on December 10 largely due to a dismal jobs report.
IF price closes below the T-Line, then I could easily see selling pressure coming into play.
First target: 3550, where price was previously in consolidation
Second target: 3000, or when the market touches the 50 SMA, shown in gray.
If this happens, it's quite possible that this will be just a normal correction.
On December 15, the Electoral College votes will be certified. Barring a major surprise, the markets could resume their bull run.