SP500 Levels: Buy Zone morphing into No-Fly Zone (for the shorts)

Yesterday’s low volume correction day on the NYSE was a signal in and of itself. Some people are tired of 2008, and they just want it to end.

We’ve had a great year in 2008, and we’re looking to make 2009 and better one. The immediate term setup for the SP500 continues to be bullish. I have established a “No-Fly” Zone for my own short sales in the 864-884 range. The key here is that we finally have a bullish trade-able range. With the crash in the VIX now in the rear view mirror, I think the January effect will have a very good shot at self perpetuating these higher lows we have been making, both locally, and globally. Don’t forget the Obama macro calendar catalyst will be front and center on investor radars come January 1st (next week).

This US tape remains one that you should trade. The only SP500 resistance I see between here and 997, is 914.

Keith R. McCullough
Research Edge LLC