FOR TUESDAY: (12/6) Trade waiting on the ECB on Thursday and the feeling is that QE will come to an end and that rate hikes will come eventually and the Euro is happy—and it is very oversold anyway. We have more of a bias for an upward breakout on stocks than a breakdown. There is a sense from currencies that a more significant turn is happening for December and yet we need a few more clues–and the chance for acceleration right away before ECB seems unlikely for the Euro or the dollar.
DEC. E-MINI S & P 500
SWING TRADING RECOMMENDATION: Buy Dec. e-mini S & P at 2197 with a 2191.50 stop.
S&P ANALYSIS FOR TUESDAY: (12/6) Lot’s of mixed technicals, patterns and cycles. Support is at 2198 and 2195.50-2196.50. Much below 2195 and especially 2190 would suggest congestion before ECB to 2185 rather than acceleration to 2230-35. Risk-taking cycles are still rather strong the next few days so that the chances for a breakout seem stronger than a move to 2150. The DOW made new highs. NQ continues to struggle despite Apple’s self-driving car. SP cash filters out the noise and projects 2184 but cash hitting and taking out 2217 would negate that thought. Tuesday may be the best day for a breakout. More inclined to be a buyer above 2195 if the market doesn’t surprise overnight. We also have contract rollover to the March contract by Thursday and that will add another layer of complexity to trading this week.
OVERALL: (12/5) It wouldn’t take much to create a 3rd-wave acceleration to 2235 and 2250 and at this point a pullback to 2185 may be all we get. We have a bias for higher prices from FOMC into Dec. 22 and then lower into the end of the year and probably retracing into the Inauguration.
WEEKLY CHART: We do expect 2345 on cash next year for a new high. 2420 is not out of the question before this bull market ends and it takes a long time to turn a steam liner around in the ocean so V tops and crashes are not to be looked for and publications that steer you that direction are being too sensational.
CYCLES OVERVIEW: Recovering Tuesday.