Outlook for Dec 1

I’m not sure about tomorrow. But I do know this rally is no longer an overbought rebound. I’ve been averaging down my short positions. For tomorrow, purely from the graph, the S&P 500 would continue to go up and test 1,251 mark first. If the rally’s momentum is still strong, the S&P 500 will continue to test all the retracements to head to 1,277.  If it breaks up the 1,277 mark, we can dream of 1,300 again. I sold all my long too early on Monday and missed this rally boat. I’m now hedging my shorts because of several reasons: central banks’ coordinated effort to supply liquidity to European banks is a symbolist move not a solution; China (the world’s largest exporter) Purchasing Managers’ Index in November fell to 49 indicating contraction in manufacturing. If this rally is a part of this year’s Santa Claus rally, I don’t expect this to complete in one leg. Pull back will happen and it won’t be a small one. My setup for the S&P 500 intermediate target changed to 1,158.

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