Wednesday, December 18, 2013

The number to beat is 1248.20 (newly revised from 1252.00), a midpoint resistance whose decisive breach would signal more upside over the near term to at least 1276.90. Despite the disappointing price action of the last three days, bulls still hold an edge -- one that will remain intact unless December 6's 1210.10 is penetrated to the downside. Otherwise, an intraday high of 1252.30 or better, or a two-day close above the 1248.20 red line, would provide the encouragement we've been looking for.

I stopped short here yesterday of predicting the dollar's next move as it approaches a critical support. However, the euro looks like a good bet to continue higher, at least to the 1.4027 target shown.  If so, this would imply a bout of weakness for the dollar.  The euro could still pull back to the Hidden Pivot midpoint (red line) without changing any of that.  In fact, it would be an enticing buy on a retracement to the 1.3660 pivot.

Yesterday's low occurred a single tick beneath a Hidden Pivot support at 1770.50 (see inset) that evidently worked to get a chat-room denizen aboard in timely fashion. A tightly stopped buy at that number would have caught the best trade of the day -- the only easy trade, perhaps, given that the futures spent the remainder of the session screwing the pooch after rallying nine points from the bottom. If this is the Santa rally, we shudder to imagine what January's going to be like.