A Bit Too Much Tap-Dancing for My Taste

(Gregory Hines in Tap [1989])

The market may very well continue to chug on higher, but the risk/reward proposition for longs is seemingly growing more unfavorable by the hour. Case in point: The rising channel on the SPY, ETF for the S&P 500 Index, which we observed earlier this week is growing more concerning today. 

Specifically, on the updated 15-minute timeframe for SPY, below, we can see how steep the rise has become, coupled with how price is essentially "tap-dancing" on its support trend-line while losing the buyer power to keep testing the upper resistance trend. 

We know these types of steep angles are usually difficult to sustain themselves immediately, even if that does not mean the death knell of this post-Christmas rally.

However, we want to be mindful of the broader technical backdrop: Despite the recent feel-good rally and some promising hot new leaders like TEAM, we are far from out of the corrective woods on virtually all of the major indices, including the small and micro-cap names which have been leading us higher. 

To be sure, I am not ready to hit the short side of this market for an aggressive bet on a rollover. But I did cash up and am far more reticent to push the envelope for what seems like a few more pennies.