FOR WEDNESDAY: (12/20) As we move into the holidays, we always worry about trading as patterns don’t come in or they take a long time to come in. Action can be erratic and weird and we wonder if anyone is really trading. In the end we have to wind down from positions unless we’re ready to hold a while with a big stop. We do see year-end profit-taking for stocks Dec. 26-29 and fund position squaring. Always tricky. We have completed Part 1 of our Yearly Forecast issue of Fortucast and it’s available. Working on covering Bitcoin futures but may take a month to really get a handle on it.
MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR WEDNESDAY: (12/20) Market went a few points above yesterday’s key resistance at 2696.50 and has come down to key support at 2682.50. Patterns suggest the next push up should go to 2706.75 with next extended target up to 2722. Obviously no one wants to buy this market near 2700 but day-traders in low volume will push it to the higher numbers. Market would need to take out 2640 to confirm an early top and we’re more inclined to expect congestive higher action.
OVERALL: We still favor 2732-40 by Jan. 5. The trade is pricing in a tax bill passage before Christmas and an easy resolution to the budget ceiling extension but cycles aren’t that promising for it happening so we wonder if the market turns lower the week of Dec. 26 if either of those fail to happen.Hard to fight Santa. I suspect that if 2699 comes in that the market may give us a few points for the short side.
CYCLE SYNTHESIS: Higher into Friday; lower Dec. 26-29; higher into Jan 5 and 7.
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