FOR TUESDAY: (11/7) We have a low-confidence read on the week, with a key cycle into Thursday/Friday suggesting a low for stocks, a high for notes, a low for the dollar and a high for gold and higher prices for crude. These markets are overdone from last week so gold retracing to 1290 and the dollar and euro retracing are healthy and crude is breaking out with the close above 5500 and everyone is hopping on board. Never trust the short side of stocks but 2600-4 on the S & P futures is very major resistance for this market and is close.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR TUESDAY: (11/7) Stocks went up to first resistance at 2590 and without a pullback to weekly support at 2577, it will be hard to chase with 2600 and 2604 next. Resistance at 2598.75 with parabolic support at 2581.50. We’re still ok being long until cash completes to 2618 but the market will obviously invite a lot of selling near 2600.
SHORT-TERM (11/3) Stocks are running out of time for more upside. Upper cash pattern completions are at 2617-8. We could see the market hold up as late as Nov. 13 but the market looks lower into Nov. 17 and while the market is often up into Thanksgiving, at best it looks sideways to lower and then lower into Dec. 6-8 around the budget crisis deadline. It does look like a Christmas recovery will happen the week of Dec. 11-15 and possibly into the Dec. 22.
OVERALL: We’ve been watching 2600-4 as a key pattern completion for futures but that could extend to 2615-20 based on cash patterns. At the moment, we can only count on a 110-point pullback into December, which would be less than 5%. We think that 2490-2500 will hold dips this year.
CYCLES OVERVIEW: Higher Tuesday/Wednesday.
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