FOR TUESDAY: (12/19) We always worry about people heading for the exits and expect them to clear out by Wednesday. 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 TUESDAY: (12/19) Almost at 2700. Support at 2688.50 and 2682.75. Resistance at 2712. Stocks failed to go down during the more difficult cycle of the week and not sure what will stop this market. Taxaphoria likely to continue but what happens when it passes—of course sell the fact which is why we have a sell-off next week into the end of the year.
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 will turn lower the week of Dec. 26 if either of those fail to happen.
In the end, bears will be frustrated top-picking and what are we going to get in January anyway: 70 or 110 points?
SHORT-TERM: (12/15) We looked closely at patterns and cycles and we’re still expecting 2 more highs to 2705 and 2732-40 before a dip to 2595-2600. Given that the market should hold up into Jan. 5, upper targets of 2732 and 2740 are very possible and likely. The week of Dec. 26-29 looks like year-end profit taking but at most that might be 70 points and the trade would recover it Jan. 2-5. It does then seem like a 3-week correction into Jan. 24-25 is likely with a recovery into Feb. 2.
CYCLE SYNTHESIS: Retracing Tuesday, higher into Friday; lower Dec. 26-29; higher into Jan 5 and 7.
