As you can see from the 7 year picture of the S&P 500 chart below, we are seeing a mix of signals. MIcro and small caps are decidedly bearish, and the large caps are up over 1% since the last posting two week ago and while they appear to be good in the short and intermediate term periods, you can see in the last chart there is weakness in on the 5-min chart.
The holidays have left us with a feast of mixed signals. But for an intermediate term investor there is considerable doubt about this market. Small companies are not confirming, the recent advances have been on low volume, and long term indicators are decidedly negative.
A 75-25 asset mix of bonds/cash to the S&P still seems the appropriate mix of risk and reward. As volume picks up in January we’ll get a better indication of market direction.