FOR TUESDAY: (11/28) Mondays often have to be discounted as a throw away day and volume usually increases on Tuesday. The week of employment report is often congestive and we’re still dealing with month-end position squaring into Thursday. Congress will recess on Dec. 14-15 and the thought is that they will do a stop-gap extension for weeks for the Dec. 8 government funding ceiling and try to pass something shortly thereafter. It’s thought that the first week of Congress being back will focus on the Tax bill, and getting that through will be crucial for the bulls–and we’re skeptical given cycles and where markets are and the way they’re acting.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR TUESDAY: (11/28) Still open to seeing 2609.75. Much below 2590 is starting to look a bit problematic. Key parabolic support at 2596.75 not likely to come out easily. Delayed reaction could happen overnight or early Tuesday but cycles aren’t that friendly the next few days and we tend to go with pattern completion and the trend.
We looked at next week and it could take until Dec. 1-3 to get cash up to 2617 so if we get no downside follow-through starting Tuesday, we’ll be in congestive mode. We’ve often seen topping action take a week or so and a V-top is unlikely. Even 2609.75-2612 comes in, the market may congest the week between 2596-2612 and then do a final push up to 2620-22 on futures and 2617 on cash.
OVERALL: Some cycles turn negative later into the week into Dec. 1st. The divergent high to 2612 may come and maybe cash will get up to 2617. We’re seeing at least a 110-point fall to 2505. Lower target is possible to 2400-2385. It does look like a Christmas recovery will happen the week of Dec. 11-15 and possibly into the Dec. 22.
CYCLES OVERVIEW: Topping Tuesday; congestive and lower into Thursday; higher Friday.
