Before the Open (Dec 7)

Posted on by Jason Leavitt

Good morning. Happy Wednesday.
The Asian/Pacific markets closed up across the board. Hong Kong, Indonesia, Japan, Singapore and Taiwan rallied more than 1%. Europe is currently mixed with a lean to the downside. Austria (up 1.8%) is the only 1% mover. Futures here in the States point towards a negative open for the cash market.

The market has done very well recently. The S&P is up about 100 point over the last 7 sessions. All of the losses incurred since the late-Oct, early-Nov consolidation patterns broke down have been recovered. But I’m not sure I like what’s been going on the last couple days. The bulls are getting more complacent. There’s a growing consensus the market will rally into the new year once the European summit has passed without any major negative news. We’ve had several small range days on light volume which I don’t like. I also don’t like how the indexes have been slowly creeping up. I’ve seen steady creeps continue, but they do get my attention. I wouldn’t be very surprised to see a pullback here. If the S&P can rally 100 points in 7 days (it actually moved up 100 points the first 5 days), it can certainly pull back 50 in a couple days. I’m not predicting it, just more willing to recognize its possibility. If the market does want to pull back, my first S&P target is 1240. After that 1200. Yes all the way down at 1200. That ought to shake the tree a little and cause the bulls to doubt the prospects of a year-end rally. Consider all possibilities and have a game plan for each. More after the open.
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0 thoughts on “Before the Open (Dec 7)”

  1. I thinnk we’re ripe for a pause or pullback. What has interested
    me is that during the 3 sessions Fri-to-Tues, the VIX has traced out a
    slightly rounding bottom while the Dow has moved up each day. Seems
    like nonconfiramtion of the price trend. Also, while yesterday was
    “up” on the DJ and SPY, the NYSE A/D line was flat and the BAS was down a bit.
    Don

  7. I’ve covered my remaining short SPX position at 1255 having missed/blown the opportunity earlier in the AM to take a bigger profit under 1250.
    If 1245 is the bottom end of this pullback from 1266+, does that mean an explosive rally is ahead? I’m still inclined to think there’s further downside to the 1225-1235ish area and even to Jason’s 1200 area, but I don’t see any downside momentum building on these pullbacks. Maybe I’ll short again if 1256-1258 holds rally attempts.

  8. There I go again. Now that 1253-1255 support was finally broken, I took a short position at 1253 on the bounce back. Now that we’ve entered the last hour of trading, we’ll how wise that was. I may not hold this trade that long.

  10. the world is controled by the evil doctor zog
    he likes the euro atm and plays the oil opts
    his broker is oil can harry
    as my leading ind i use the ftse—a oil /comoddity /banking index of the worlds larges shares—-london also controls all the arabian interests and the dubi index
    we have quad witching coming up and oil can harry has vowed to make a killing
    i agree with Don above—-the vix is giving missleading and diverging info at the moment
    and is not low enough for real insto buying
    i disagree with the wave principle atm and think we will be flat when we meet the quad witches——this will create a lot of chop—-i normally dont like chop soyie
    inconceivable sharp spikes occure in either direction –instantaniously
    as a scalper i am mostly out of the sideways moves—today was a choppy tick ind
    im having better luck with the premarket which appears easier to read

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