POSITION: Short SPY
Last week was the best Thanksgiving week to be short stocks since 1932. This week has been one of the best weeks to be long stocks in 3 years. It’s what La Bernank calls the “price stability”, baby!
No matter where you go into the close, here we are – setting up for next week.
Across durations in my model, here are the lines that matter most:
- Long-term TAIL resistance = 1270
- Immediate-term TRADE resistance = 1259
- Intermediate-term TREND support = 1204
In the attached chart, I also show a very immediate-term TRADE support line at 1234. Breaking that line on a sharp down move puts 1204 in play – and in a hurry. Holding 1234 will provide the 2011 bulls an opportunity to suspend disbelief until Santa arrives at lower-highs on the 25th.
What could go wrong next week? I think the Euro’s intraday move today is already previewing that. We think the European Summit could very well disappoint whatever market expectations remain for an immediate-term solution to a long-term leverage problem.
Enjoy your weekend,
Keith R. McCullough
Chief Executive Officer