Oh Dear, Goldilocks is eating the bears.
The only running measured move short set-up is broken in pre-market. If bulls can hold, we are back in game on upside.
This market's strength is frightening as well as charming. Continuing rally without any meaningful correction is dangerous but if this is what market gives, this is what we need to take. Moody's downgrade for UK's credit rating simply sent the UK markets higher and GBP sharply lower which I guess these days is taken as sign of perpetual prosperity at least for the stock markets. Overnight Japan made noises about bringing in a doveish central bank governor and their markets are up 2% as well. Even the damp news of lower Chinese PMI brought in a mere few points dips in the sentiments. Looks like the party is well under way and carrying on. Bring on the champagnes!
1495 was well defended support area and is now a line in sand for bulls. It appears bulls might make an attempt at all time high for S&P before giving up any of their positions. With that in mind, I would expect support to be found at 1518-1515 area today leading to a move up to 1528-30 (which can also trigger some stops above 1530).
We might have some reactions to political comments related to The fiscal cliff nonsense version II . Italian election results should be coming towards close and might have an impact on tomorrow's trading. I will update the comments section as the day develops. If you are subscribed by email to comments, you can follow the discussion.
Today my initial bet would be to find support in 1518-1515 area leading to a move up to 1528-1530 region. I would expect the high of the day in 1530 area expecting a 10-12 point range. Key support for bulls is at 1506, any move below that will spoil the party for sometime.
In my hypothetical stock portfolio I am looking to cover SPY short to bring it flat or long.
If market starts breaching 1506 I would need to reject the bullish case and expect further move down.
