Some Key Charts Look Troubled

On a number of key charts, I'm seeing some signs of technical trouble that could determine the intermediate-term health of the market as we head into the new year. These require careful monitoring, as they could help put your trading thesis in context.

S&P 500 and VIX -- Daily Source: StockCharts.com View Chart » View in New Window »

To start with, the S&P 500 Index broke above rising-channel resistance in October and has continued higher -- but, as I noted in a Columnist Conversations post last week, action in the index is starting to resemble a broadening-top formation. Last week's test of pattern resistance saw the start of a pullback that looks to test the former November highs in the 1810 area. This would represent a modest decline. But if that level fails to hold, the key to the intermediate-term health of the broader market will be the 50-day moving average, as well as the zone defined by the broadening support line and the longer-term channel resistance-turned-support line....401 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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