Technical Tuesday – Markets Need a Boost, But from Where?
Is our rally getting tired already?
As you can see from our Big Chart, we're curling over right about our 50 dmas and we don't want to do that because those are declining 50 dmas and if we follow those down then we add negative data to the 200 dmas and, once they start curling down, we're pretty screwed.
So, we need something to boost the markets and it's not looking like it will be a sudden solution to the Fiscal Cliff and it's already December 4th so only 14 trading days until Christmas and I think we're going to need a miracle to pull this one out of a hat.
There's not much for data to move us this week – just Productivity, Factory Orders and ISM tomorrow, Consumer Comfort on Thursday and Consumer Credit and Sentiment on Friday. Next week we have the final Fed meeting of the year Tuesday and Wednesday and next Thursday we get Retail Sales and Industrial Production on Friday so, if we're going to have some kind of launch based on data – that would be the time for it.
Otherwise, we're adrift and counting on Congress to "fix" things in order to get the markets moving again. Dave Fry's SPY chart shows the relentless selling we got yesterday as soon as the bell rang in the morning – erasing all of the pre-market gains and dropping us back to just under 1,410 on the S&P.
We're still holding our strong bounce lines of Dow 12,950, S&P 1,400, Nasdaq 3,000 (barely), NYSE 8,100 and Russell 805 but the Dow is too close for comfort and, as I said last week – losing ANY of our levels at this point is going to be a very bad sign.
That's why we've held onto our TZA weekly $16 calls (now .12) in our virtual $25,000 Portfolio and why we are 9/10 covered on our AAPL spread as well. We took a lot of open bullish plays off the table last week as we approached this level test and, now that we may be failing it – we certainly aren't feeling more bullish!
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