Yesterday the S&P 500 traded down to the 200 period moving average (1227.50 on the 60 min chart) for the first time in 12 days. We quickly saw buying come into the market and the ES closed the day up more than 10 points off the low. The current rally (and up-trend pattern) that began on December 1st, has not yet broken down technically, so there is no reason to be bearish... yet. That being said, I remain confident that a short-term market top is in formation. I expect to see continued up and down action for the remainder of 2010 with the formation of new highs still likely. We may have to wait till the new year before seeing the market correction I anticipate. My strategy for today and the coming week is to short new highs and buy dips.
For this morning, I am bullish, though trading action may be light and possibly boring. Asian stocks closed around the flat-line and European stocks have been quiet. I expect the ES to test the highs of 1242 with potential to trade up to 1246-1247. I will look to get long when the ES trades down around 1235-1236.
If I enter any trades, I will post them in the comments...
Friday, December 17, 2010
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