FOR THURSDAY: (12/7) While the debt ceiling is an issue, the Treasury can find emergency money buy borrowing from the Government employee pension fund like they have done before. The U.S. Treasury would exhaust all of its borrowing options and run dry of cash to pay its bills by late March or early April if Congress does not raise the debt ceiling before then, the non-partisan Congressional Budget Office said on Thursday. “If the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted and the Treasury will most likely run out of cash by late March or early April 2018,” it said. So Friday’s deadline is a bit artificialland we wonder if the meeting with Bernie Saunders and Elizabeth Warren and Trump will produce any progress.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR THURSDAY: (12/7) Stocks fell enough to complete a minimum pattern. Minimum support area of 2620 came in on the S & P with lower support at 2617 still possible if something happens overnight but probably have to gamble on longs by Thursday.
If the market continues to hold 2610 and falls only in 3 waves then our bullish idea for 2689 and 2710 will be in tact. If the market falls in 5 waves and takes out 2600, then a larger pullback to 2555-60 will start and that is always possible as we move into the end of the year. We sense that stocks could move up nicely Dec. 11-15 if there are no major governmental challenges with the budget ceiling. Chances are we will buy in the morning if the market is behaving.
NEAR TERM: Telescoping nature of the breakout suggests at least two more highs and our projection to 2689 still should come in but will it take until later in the month? Doubt it will happen this week. The chances of a quick stopgap measure for the budget deficit so they can all do Christmas is also inevitable.
OVERALL: We’re seeing at least a 110-point fall from wherever the market stops but not that might even be 2689. It does look like a Christmas recovery will happen the week of Dec. 11-15 and possibly into the Dec. 22. There is not much time to fall but the week of Dec. 4-8 is very possible. It has been suicidal to top pick this market and it’s not due for a final top until June 2018.
CYCLES OVERVIEW: Higher Dec. 10 and Dec. 16.
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