FOR FRIDAY: (12/2) Friday’s employment numbers may not mean much with a 98.6% chance for a rate hike Dec. 14 so even a bad number would not have an impact. The Italy vote and Austrian election seem more important for Sunday and given extreme reaction from Brexit and Trump, it’s hard to take anything home over the weekend. Either your top or bottom-pick very key numbers with big stops or stay out of a potential meat grinder where no one wins. Contract rollover to March currencies coming over the weekend and that’s a good reason to be flat there. Hard to imagine stocks blasting to new highs before European news and then we have ECB with an expected taper coming next Thursday. Currencies tend to over-react the most to these events and we’ll have to be flat for the weekend. OPEC good news is off sold off as they inevitably cheat on the agreements or fight later.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR FRIDAY: (12/2) Support at 2183.50 and 2179 and 2173 and we’re not far away from completing a 30-40 point pullback that we discussed last week but much of it happened after OPEC’s divergent high on Wednesday, preventing us from enjoying it.
Market is a bit oversold with resistance at 2195 and 2200. We favor sales more than buys on Friday but we need a better spot and may not get it. Not sure it’s possible to take anything home and if 2173 comes it may set up a buy-the-fact on Sunday night.
OVERALL: It wouldn’t take much to create a 3rd-wave acceleration to 2232 and 2250 but we are more likely to see a pullback to 2140 into mid-Dec., which is seasonally lower and then a secondary high into Christmas. After Christmas, the market looks rather vulnerable. We’re starting to wonder if January will be vulnerable even if we see higher prices into June.
BIG PICTURE: The market is acting like it’s in a 3-of-3 expansion wave and the current projection is up to 2292 on cash and maybe 2342 on cash by 2nd quarter and maybe 2392 as an extreme target for 2017.
CYCLES OVERVIEW: Lower Friday; volatile Sunday; bottoming early Monday; recovering Tuesday.
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