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With generally favorable Asian equity market action overnight and mostly positive action seen in the early UK equity markets, the bullish bias would seem to be poised to extend into the US Thursday action. For a while yesterday we thought that signs of forward movement on US Health Care reform would be seen as a budget busting negative to US stocks and bonds, but instead the market seemed to be lifted by the prospect that the latest compromise might lead to a positive solution. It is also possible that the market was simply looking at the prospect of lingering low interest rates, or perhaps it was simply looking at the better than expected US number flow. It is also possible that the latest compromise bill lacked a government run option and that was a relief to investors. However, the prospect of significant change in the latest “bill” is very high, as this issue has become a major polarizing issue in America. With the equity markets being presented with initial claims and housing figures this morning, it is possible that the macro economic news will be partially offsetting this morning, as the claims are expected to illicit slowing concerns, while the Housing readings are expected to foster more hopes of recovery. One has to continue to favor the bull track, given the recent date flow and the capacity to discount events in Washington.

S&P 500: Like other market measures, the S&P has managed another new high for the move in the early going today and that would seem to suggest that the bull camp retains its edge. However, the market is somewhat overbought and the bull camp will probably need a better than expected Housing starts and permits report in order to extend the rally straight away. Near term up trend channel support in the December S&P is seen at 1060 today, with many tech traders now projecting the next resistance zone in the S&P to be up at 1075.

DOW: With a pattern of higher highs this week and various sectors managing to step up to lead the markets upward, we have to think that the upward bias will remain in place. Certainly the markets have become partially overdone from a short term technical perspective, but the markets overall were not classically overbought in the last COT positioning reports and therefore corrections within each trading session seem to be capable of balancing periodic overbought conditions. Critical up trend channel support in the December Mini Dow today is 9,715, with near term upside targeting seen up at 9,775.

NASDAQ: While the Nasdaq has already seen another new high for the move this morning, the Nasdaq was presented with some partially discouraging news from the tech sector overnight and that could leave the Nasdaq as a laggard versus the rest of the market this morning. Apparently Oracle failed to meet market expectations on sales, but we suspect that news of other merger and acquisition projects will serve to keep sentiment toward the Nasdaq up beat. However, the failure to hold above 1712 this morning could signal a more modest correction before the market regains its bullish footing and in turn moves to an even higher trading range.

TODAY’S MARKET IDEAS: The bears need something definitively negative to alter the ongoing bullish bias in the marketplace.

This content originated from – The Hightower Report.