Stock rally stalls as traders return to work

I’ve taken some time off during the last two weeks. Often during the last two weeks of the year volume tends to drop off and often there is lack of follow-through on signals. I don’t have much to say on the first normal trading day of the year. The overall price pattern on the S&P looks somewhat like a sloppy inverse head-and-shoulders with a downsloping neckline setting up. The big problem is the declining volume as the right side of the pattern tries to form. It’s normal for volume to drop off during the holidays, but traders are back and volume barely budged. The trend indicator looks flat and momentum, while increasing, is entering the overbought zone. It can stay overbought, but if momentum should reverse back down with an increase in volume, one might expect further testing.
The advance/decline ratio has improved, which leads me to believe that a test back down has a chance of holding. I am leaning in the bullish direction, but would like to wait for a few probes down to judge if there is rejection on those probes, or if volume can start to expand on up impulses. I don’t have enough information at this point.
Oil is still in a downtrend, but downside momentum looks a bit tired. I will await the trend to change to up and then buy pullback, probably with put credit spreads on the USO. It seems those same people that were calling for $200 oil a few months ago are now calling for oil in the low $20 range. They were wrong then and suspect they are wrong now. The traders have shifted from one side of the boat to the other. But I will not try to pick a bottom. I will wait for the trend to reverse.
Gold has had a nice run as the government is trying its best to destroy our dollar. The weekly trends look sloppy, and the daily charts has some momentum divergence. If prices come back down into the moving average area there may be a good long entry point. I will try to put up a chart tomorrow.