Father Christmas MIA?

So far the "seasonal" Christmas rally hasn't materialised, and Father Christmas seems to have gone MIA as far as stock markets are concerned.

However there is still time for bears and bulls to be happy with their Christmas presents!

Looking at the charts:

DJI  daily 

The action is still in the large triangle (with a sloping upper boundary - leaning towards bearish)

Great for traders playing the range

Bear market rallies are vicious "in the bear market that began in 2007, stocks staged 12 rallies of 5% or more, with four of the 12 logging gains of more than 10%." - Kiplinger (for more statistics look at this page)

So as usual CNBC are still looking like headless chickens when the market heads south and when the rallies happen they are jubilant and bull happy.

What does it mean?

EVEN if the market is a long term BULL, there always is a correction - this is a normal process - and healthy for up trending markets.  However a 5-10 % correction after a 360 % rise since 2008 is probably not enough of a correction.

Monday will be interesting:

Gap down and target 23k or rally and stay in the triangle - time will tell.

DAX seems to be heading to the head n shoulders target (10200)

FTSE seems to be holding relatively well - this may be Brexit related with a crucial vote coming on Tuesday

So world markets seem to support more downside for the moment.

So bulls and bears can win.. a fall next week followed by a rally.

Longer term the markets may be signalling the end of the 2008 bull run.

SPREAD charts:

Sometimes good to look at spreads between different indices.

This is  DAX- NASDAQ 100  spread..

so at the extremes a play is Sell DAX and BUY NDX or vice-versa  looking for the spread to normalise.

At present it looks like Buying DAX and Selling NDX should be a profitable trade over the medium term, expecting the spread to expand again.