Failure to hold above 1,975 could see a re-test of 1,900, 1,820 (Fibonacci and price support), or lower.
Price on the SPX:VIX ratio (see 20-Year Daily ratio chart below) closed on Friday just below the 150.00 major resistance milestone level that this ratio reached before succumbing to the pressures of the 2007/08 financial crisis. So, although the SPX made an all-time closing high on Friday, the SPX:VIX ratio has not; however, the Momentum indicator has also made a new 20-year high on this chart...signalling an expansion of extreme bullish sentiment.
We may see some very volatile intraday and overnight swings come into play before market players finally decide whether to go "all in" on equities in preparation for a potential Santa rally. Such a scenario could, theoretically, see price on the SPX reach a level of 2,140-50ish by the end of the year (the next Fibonacci and channel convergence resistance level). Watch for confirmation (or divergence) of sentiment and momentum on the SPX:VIX ratio chart during this time.
