We’ve now bounced 600 points and we’ve breached the 13,000 psychological level. In my opinion, we well chop around this level for the next month. Day to day we may have volatility based on the play by play coverage of the “fiscal cliff” confrontation in the US capitol. 13000 is the mid point of the 1000 pt trading range we’ve been rappelling through for the past 5 month.
When we near the top, the TV anchors bust out the Champagne and sing the praises of their favorite politicians. When we near the bottom, it gets eerily quiet and the focus shifts to the evil greedy speculators manipulating the markets. That’s a story that never seems to stop selling advertising minutes.
Bottom line, these are the levels I want to be selling into. I’d look to cover shorts in the Dow at 12,809 and then 12,665.
In the S&P, we are at 1416. I’d look to scale in sell here between 1416 and 1420. I’d look to cover shorts down at 1399 and then 1389.
As always, keep your stops tight.
CER
