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Oil prices traded lower again today. That coupled with an anemic retail sales number spooked traders. SPX lost $40 to close at $2012. RUT traded down $25 to close at $1124. All of this downward pressure on stock prices spiked trading volume with 2.8 billion shares of the S&P 500 trading today. Trading volume rose 16% on the NYSE and also increased 18% on NASDAQ. Volatility bumped up five points with the VIX at 24.3%.

Lower oil prices are a two edged sword. The energy companies are hurt but the higher cost oil production operations like oil shale and tar sands are devastated. But these low oil prices result in lower gasoline prices for consumers, which can be a boon to consumer spending. But consumers are hunkering down. Retail sales rose 0.2% in November, especially lethargic for this time of the year. A bigger concern is lower commodity prices in general may be signaling declining demand. Does this suggest a global recession on the horizon?

The Producer Price Index (PPI) reported +0.3% for November, up from the -0.4% of October. Retail sales increased 0.2% for November, up from +0.1% for October. The University of Michigan consumer sentiment survey reported a small increase for December, up from 91.3 to 91.8.

The most bearish observation for the technical analysis of the SPX chart was the breaking of support at $2020. Up until the last hour of trading, that support level from mid-November appeared to hold, but the markets traded lower for the last hour of trading. The only bright spot was a slight recovery so SPX didn't close at its low for the day, but it was close.

Now the spotlight is even more intensely focused on the FOMC announcement and their decision on interest rates. It had been a foregone conclusion that the Fed would begin the process of raising interest rates this month. Now it isn't as clear.

I don't think many of us traders will have a relaxed weekend. I reduced much of my risk today, but...