S&P 500 - November 30, 2009

Not a whole lot to say about the market. In the last post, I said I expected a bounce Monday or Tuesday. S&P bounced in the morning, then dropped to 1080-1085 area for another test, and rose into the close.


In the weekend post, I said

Another problem Maktoum has is that he cannot just print money without other Emirs’ approving the print.

But still, it’s only 40 billion as per the news clip above, surely, somebody can print it!

Now, we hear that that the big daddy Emir of Abu Dhabi (Abu Dhabi is the super oily emirate) seems to have approved the print.

For the day, volume was below average. Breadth was OK


The Dubai thing could not even push the index to 55 EMA. But remember that I said that in the future market S&P tested the 1061 pivot which coincided with the 55 EMA. Sometimes studying the future market action gives us invaluable cues. So far, as things stand, S&P has successfully retested the 1061 pivot (via the future market action) and that I think is a subtle point of importance over what we see in the cash market. And that’s why I think just breaking below 1080 is not good enough for the bears, they need to take 1061 and hold it for that was the pivot under stress test because of the Dubai thing.

McClellan Oscillator is kicking tire in a range in the neutral zone


Deeper under the hood, things are not all that strong


Less and less are participating in whatever rally we are getting these days. Bulls need A/D line to start rising.

We said that TRIN could possibly get us a bounce. It’s now at neutral. Maybe we get some more positive action out of lingering short positions, and then it will be time for the bulls to show us what they got.

Remember the big picture


And remember the short term range of 1080-1110, and the 1061/1107 pivots. I think that’s all I need at this point to keep me out of trouble

Let’s Wrap Up:

S&P is still sandwiched between the 2007 downtrend line and a short term uptrend from August.

Bears have been playing as extras since March. If they want some leading role, they should start by taking the index below 1061 pivot and keeping it there.

Bulls need to breakout above the 2007 downtrend line on good volume.

With the short USD and long everything else trade being as crowded as it is, this is a very, very dangerous market. Unhedged longs may be blindsided at any time with the underlying bid disappearing from the tape.

There is no short term trend, just a choppy lateral move. Mid-term trend is up. Long term trend is down.

Support is 1091, 1061 (a tough pivot for the bears so far) and 1041. Resistance is 1107 (a tough pivot for the bulls so far) and 1133