We are now at a dangerous point, as we managed to close at 1126 spx last week... which is at the 50% fib level from the 2007 high to the March, 2009 low. Â But for now, I suspect that the light volume during this holiday season will continue to allow the market to move up higher or just sideways. Â Therefore, I don't see much change next week, as we are still in a "holiday season" until next year.
Now, that doesn't mean that we can't pull back a little next week, (Monday would be the most likely day) and then rally into the new year (just no trend worth playing yet). Â Maybe a one day correction to fill the gap around 1103 (at the most)? Â I can't take anything serious until the volume comes back into the market. Â The spx can be controlled easily through the dollar, financials or commodities. Â Forecasting it now is useless, as any technical weakness will be bought by up.
Of course any major political event could cause a big drop for a few days, but who knows when something bad like that can happen?  Only those that are in power can know that.  Let's hope that they don't do anything stupid, as I certainly don't want a major war to break out somewhere again.
Moving on...
The dollar looks like it is back testing the moving averages and support lines, before another move higher will occur. Â That lends support to a bullish scenario for the market next week. Â Couple that will extremely light volume, and that should stop and serious sell off.
Personally, I'm staying out of the market until next year. I do see a big move coming, but I'm not jumping the gun just yet. Everyday brings new challenges, and opportunities... at least for some players. I'm waiting until I see something that has better odds of success.
Red
