Santa Claus or Bear Claws
So far, Santa Claus was a no show for bullish investors. We didn't get a December rally, but maybe we can still get a rebound.
The rapid market decline in December has left the S&P 500 very oversold. The Dow even dipped into bear market territory.
To see the big picture, take a look at the monthly S&P 500 (below):
(1) The S&P has reached its MONTHLY 50-EMA, historically a strong support level for market corrections.
(2) RSI-20 has reached the 50 level (currently 49) which is commonly an area of support.
(3) RSI-4, a short-term momentum indicator, is oversold at a level of only 9.
Keep an eye on the S&P during the next several days. The first step to a rebound would be a close above the 2,380 level, accompanied by very high volume.