FOR FRIDAY: (12/8) Kick-the-can down the alley has happened with the House of Representatives, working against a Friday midnight deadline, approving legislation to fund a wide range of federal programs through Dec. 22 and sent it to the Senate, which approved it as well. The White House has said Trump will sign it into law. With a Congressional recess starting Dec. 16, they have another week to duke it out. In the meantime, FOMC is sneaking up next week so not likely to get acceleration with anything until that gets out of the way.
DEC. E-MINI S & P 500
S & P ANALYSIS FOR FRIDAY: (12/8) Market barely took out 2640 and our morning advice for buying 2627 was right on even if we didn’t do anything officially. We were too nervous about the debt ceiling, which is probably not a big deal as we explained last night. Patterns would get the market up to at least 2649 and 2656 and we have to favor the congestion triangle, which means 2656.50 will halt advances and then the market will turn down toward 2632. Cycles are wobbly enough that a failure on Friday to take out 2660 could lead to 2632 by Monday or so. FOMC is also setting up into Wednesday and that will create congestion and then probably a rally out of there into Dec. 15. Ideal buy is closer to 2633 if it comes in but then taking quick profits at 2656.
NEAR TERM: 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. 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 the next few weeks.
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. 14-15 and possibly into the Dec. 22. There is not much time to fall but the week of Dec. 4-11 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 into Dec. 8 and 10; lower into Dec. 11-12; volatile in Dec. 13; higher into Dec. 15.