The bulls held near-term support and were able to make a run to higher ground on Thursday despite the circus in DC. The zombies continue to play a high stakes poker game with the Fiscal Cliff as the market ignored the rhetoric thinking a deal could still get done. However, today might be a different story.
The Dow gained 60 points, or 0.5%, to settle at 13,311 on Thursday. The blue-chips tested support at 13,200 after trading down to 13,216 but rebounded to reach a peak of 13,314. The next level of resistance is at 13,600 if 13,350 is cleared on the close. If 13,200 fails to hold, expect 13,000 to come into play.
The S&P 500 added 8 points, or 0.6%, to end at 1,443. The index continues to struggle with our 1,450 target which would clear the way for a run to 1,475-1,500 but held support at 1,425. The low for the session was 1,432 and a drop below these levels could lead to a retest of 1410-1,400.
The Nasdaq advanced 6 points, or 0.2%, to settle at 3,050. Tech traded to a low of 3,034 but held paper-thin support at 3,025. A close below this level would lead to a retest of 3,000. The close at 3,050 was super bullish but it may not last.
We mentioned our Plan B on Sunday night as we started to prepare for a Fiscal Cliff deal not getting done by today. Interestingly, the red zombies also took a Plan B approach earlier this week that was supposed to be voted on last night after the market closed. The problem was the Republicans didn’t have enough votes to pass their own bill.
In typical zombie fashion, they decided to take Friday off and will not meet again until after Christmas. Wall Street is yelling to shut the front door and futures are getting clobbered as we head to press: Dow (-179); S&P 500 (-22); Nasdaq 100 (-42). Yikes!
We have been locking-in profits all week because we gave the zombies a deadline that will likely get missed. We have also raised the Hard Stops on our trades that are showing nice double and triple-digit profits so please read all trade instructions carefully.
We will send out Profit Alerts if our trades start to close -or- if we take any new trades. We said volatility would be picking up so hold on tight! Subscribers, check the Members Area for the updates.