Market Analysis for The Week of 12/7
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Range on ES this past week was compressed for most of the week as the Friday 11/28 spike proved resistance and the weekly 6809.5-6812.5 level proved support. Futures opened Sunday night, failed the 11/28 spike, and took out the 11/28 low as expected. However, Monday was a “gap down buy.” with the cash hours low 6812.75. On a cash hours basis, sellers did not take out a prior day’s cash hours low all week. 6809.5-6812.5 held again overnight between Monday and Tuesday but the 11/28 spike (57-64) continued to prove resistance. Wednesday and Thursday worked through 57-64 and Friday finally sustained above it. From last week’s plan:
This move Friday took SPX to an area of caution for me, 6895, which corresponded to 6905 ES on Friday (just below its structural equivalent at 6909.5 due to decay).
Both the daily and weekly are framing higher, while the monthly timeframe is in balance. This latter fact is part of the reason the action was ferocious off the low, but now choppy toward the highs. We have reason to be cautious near the top of the range until it breaks with conviction. This week has FOMC so a lot can happen. QT has ended and the Fed is almost certainly going to cut rates. Bulls have every reason to rally here. If they cannot, however . . .
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