Merry Christmas; S&P Down 3 In A Row "Watch Out For The Witch~She's A Killer"

HO HO HOAX   

Jeez, bring in a little holiday cheer will ya? The trees are up, the stocks are hung, holiday shopping is in full gear but the stock market is back in the crapper again. Throw the seasonal to the wind because the European banking crisis is front and center. Ordinarily this is the time of the year that the stock market out performs.  So far this week, it's done nothing but under perform. Between the roll over and all the bad news out of Europe,  people are pulling up their tents and have either quit trading for year or cut back dramatically. There is no risk on, risk off trade going because the public is not trading.

We listed several reasons for why the stock market should rally this week and none of it has worked or at least it hasn't so far. It's 5:30 am and the SPH is up 5.10 at 1211.40, crude is up .70 cents at 95.65, gold trading 1,592.40 and the EC is up 32 at 130.07. In Asia 11 out of 11 markets closed lower (Heng Seng Down 1.78%) In Europe 9 out of 13 markets are trading higher (DAX up 1.04%) The main headline this morning is “Stock Index Futures Signal Early Rebound” Today's economic calendar starts with the Jobless Claims numbers, PPI, Empire State Mfg Survey and the Current Account numbers at 7:30, the Treasury International Capital number at 8:00, Industrial Production at 8:15, Bloomberg Comfort index at 8:45, Philly Fed at 9:00 and the Nat Gas numbers at 9:30.

Our view? Today is the 15th (mid-month) so far they have not done any mark ups and they have taken the crowd from long into the rally to short into the decline; again! We still feel there is going to be some type of bounce and today could be the start of that. If you looking for the Santa Claus rally it may not come until the last week of the year. We learn to buying weakness today with tight stops.
As always use stops and keep an eye on the 10 handle rule.

VOLUME 49k SPZs,46 k SPH, 593k ESZ and2.58 mil ESHs traded
SPREADS: 44k SPZ/H and 53 SPZ/M spreads traded
FV:  S&P,  NASDAQ

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MERRY CHRISTMAS; S&P DOWN 3 IN A ROW “WATCH OUT FOR THE WITCH~SHE'S A KILLER”

Wednesday's trade started with 490k ESHs and 1.1k SPHs traded in GLOBEX, the 7:30 release of import export data that came in lower than expected. RTH's opening was a 6 handle gap lower 1214.50 to 1213.50 range, followed by rally up to a new high at 1218.20 and then did exactly what it's done for the last few days…got hit by several sell programs. This time we went down to 1207.00 which has been the overall price action over the last 3 days. The SPH sells off, short covers a little bit then the premiums slip and in come the index arb sell programs. After making the 1207 low the SPH slowly rallied back up to 1211.50 and at 9:58 was making a new lows at 1206. Gold was down 70$ and crude was down $4.20. The SPH rallied up a few handles then sold off and made another new low at 1205.20 and did the same thing, rallied a few handles and then made a new low at 1204.50 and then made another new low at 1203.50, rallied a little, sold back off down to 1204 and at 11:12 was back up trading 1208.70.

The SPH pulled back a few handles and then got hit by a buy program going pushing the future back up to 1209.50 just after 11:30. After a small pull back the SPH traded up to 1210.30, slow and steady is the name of this game. The next small buy program pushed the ESH back above 1213.00 (3's) then traded band to band testing the 2X bottom area 1205.50's as OIL was making fresh lows down over -5.5%. At 2:00pm, guess what? The SPH just sold off, retested the 1203.50 low and bounced back up to 1206.00 and then sold off down to a new low (new low buy a tic trick / “failed auction”) at 1203.00 and just after the print went up on the board it was trading 1208.00 2 minutes later. Then true to fashion this headline came out; Greece's Piraeus Bank to Seek EUR400 Million Government Bailout and the SPH sold down to 1204.50. The cash imbalance showed $225M to sell; cash close traded 1205.00 and settled at 1206.30's. After the close Fitch Downgrades 5 Major Commercial European Banks @Benzinga and ESH was up .5 handles at 3:40CST PM as traders waited on the Chinese & European PMI released at 8:30CST PM and 3:00CST AM.

Yesterday's MrTopStep's Video  http://tinyurl.com/cup4jxm

MrTopStep Talks Benzinga Radio WrapUp - http://tinyurl.com/dymgq5t

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ECONOMIC CALENDAR: http://mrtopstep.com/economic-calendar

CONTRIBUTORS' CORNER

SPX CHARTS ~~Roger Volz, BGC

SP 500 futures 5 min indicators gets initial very short term oversold readings in globex session following fall from 1225.50 to 1216.50 (following IFO cutting German 2012 GDP estimates).

A brief bounce to 1221 (after Norway rate cut) corrects

Drifting towards yesterday's low following Merkel ECB bond comments

The next ledge of VST OS looks around d1212.25 on the current stair step down.

Closing support in daily chart models have been tested on yesterday's low at 1213.00.

Close below opens support to 1206 with  next grouping at 1199-1198.00

Previous support at 1220.00 reforms as initial resistance with multiple levels converging at 1229.00.

SP 500 Futures 5 Min Chart Model

Nasdaq 100 Futures Daily Chart Model….complex head shoulders pattern alert

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MrTopStep & Benzinga Wednesday WrapUp Radio: http://mrtopstep.com/2011/12/mrtopstep-talks-benzinga-radio-wrapup-5/

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eubie (10:39:02 AM): “3″s PERFECT GAP FILL / 1203 from the 1206 GLOBEX FED & GLOBAL BANK interventions / LONG LEG

bob (11:01:11 PM): getting ready to grow my bull horns

eubie (11:04:02 PM): well alot of guys got all bulled UP 1266 / where are they 1205? / I like em down here as if your a A GAP TRADER / it doesn't get any better / look up GAP FILL in dictionary / its says look at 12.41.4 ESH trade

eubie (11:06:03 PM): potential 2X bottom 1203/05 area