FOR FRIDAY: (12/22) Very difficult to go into the weekend with a position, as there are often reversals with these holidays and conditions are thin and exaggerated. Three-day weekends are notorious for reversals and we always worry about weekend terrorism over Christmas, and those cycles are likely still through next week. Our staff will advise Tuesday about plays next week but if we get a bunch of gaps and no completed patterns, then it will be difficult to play.

S & P ANALYSIS FOR FRIDAY: (12/22) This morning computer models projected 2703.50 and with the House and Senate kicking the budget ceiling can down the road until Jan. 19, we might see it on Friday. Not sure the higher target of 2721 will come in before the holidays. If it does happen and we see 2721, then a 70-point pullback will happen from there next week to 2651 or 2642. S & P would have to close under 2672 to issue a deeper sell-off now in the pattern and the weekly chart turn will require a close below 2740.
OVERALL: We still favor 2732-40 by Jan. 5. In the end, bears will be frustrated top-picking and what are going to get in January anyway: 70 or 110 points? Yes, there is a natural sell zone in the 2700-2705 region but thinking it will happen by Friday, and we have Christmas volume to deal with next week for end of the year profit-taking.
CYCLE SYNTHESIS: Higher into Friday; lower Dec. 26-29; higher into Jan 5 and 7.

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