FOR WEDNESDAY: (12/7) We feel a bit in “limbo-land,” once again waiting on a major report with ECB. The market overreacted on Monday’s bounce and FOMC into Dec. 1 should be a non-event. Even if we wanted to take a position, the risk/reward on many markets isn’t there. Then we have stocks ready to roll to March futures on Thursday and that often creates distress. For now we’ll wait for the morning. There’s a lot tension building out there and a lot of anxiety and a sense that more big/absurd/illogical moves could happen but we have to wait for the right spots.
S&P ANALYSIS FOR WEDNESDAY: (12/7) Resistance is at 2213 and 2216.75 and 2219.75. We’re moving toward Weird Wally Wednesday and profit-taking may set in before contract rollover. Cash suggests resistance at 2215 and 2217 and then a pullback to 2206. Ultimately cash is looking more like it will break to the upside to 2235 and 2245 and that’s a given before Christmas and this mornings hopes for even 2184 on futures seems a long way off. Guessing range trading between 2217-2207 on Wednesday and we’ll see what the market does overnight.
OVERALL: The DOW made new highs. NQ continues to struggle despite Apple’s self-driving car. We also have contract rollover to the March contract by Thursday and that will add another layer of complexity to trading this week. It wouldn’t take much to create a 3rd-wave acceleration to 2235. 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.
