Bulls Stall at Resistance/ Gold Tanks

1:40pm (EST)

We predicted a triple-digit move on the Dow yesterday and we said the Fed’s actions and comments could set the next trend into yearend. Following a rally back to the Black Friday highs, today’s slight pullback was expected and it will be important the bulls hold the first wave of support if there is further weakness into the close.

There are also bullish signs as the S&P Volatility Index ($VIX, 13.60, down 0.20) has traded below 13.50. A close below this level would be bullish for a yearend rally and the bulls will need to hold 15 on any pullbacks from here on out. We will have more comments on the VIX in this weekend’s Weekly Wrap as we have some interesting tidbits to report.

Our best guess for the rest of the week and into next week is that there could be a struggle at resistance that could lead to a pullback to support. While it would be nice to see the first wave of support hold, the chances of a lower market into and the day after Christmas could be a good possibility. It happened last year.

Tomorrow is also option expiration day and volatility could return in what has historically been a bullish week over the past 3 decades. We mentioned the S&P 500 has ended December option expiration week higher in 22 out of the past 28 years and given the big gains for the week, this should play out well into Friday’s close. This doesn’t mean the market will automatically end higher Friday as the gains are substantial for the week so a slight pullback won’t hurt.

We will talk about how we see the first part of next week playing out this weekend but for now let’s go check on our current trades.

The Dow is currently up 17 points to 16,184 while the S&P 500 is lower by 2 points to 1,808. The Nasdaq is down 11 points to 4,058.

Subscribers, hit the Members Area for the latest updates and we will be back in the morning with a full report.

Special Note: Gold is getting hammered today as it rapidly approaching our yearend target of $1,150-$1,100 prediction from the summer. Today’s $41 drop to $1,193 is getting closer to triggering our target.

Comments are closed.

CFTC Disclosure:

GOVERNMENT REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE METHODS MAY HAVE WORKED IN THE PAST, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO A RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH Momentum Options Trading, LLC CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CIRCUMSTANCE. THERE IS SUBSTANTIAL RISK IN TRADING. A LOSS INCURRED IN CONNECTION WITH FUTURES TRADING CAN BE SIGNIFICANT. WE MAKE NO CLAIM REGARDING PAST OR FUTURE PERFORMANCE. WE MERELY TRACK EVERY TRADE AND SHOW THE PERFORMANCE OF ALL TRADES THE SYSTEM OR NEWSLETTER PRODUCES. SIMULATED TRADING IS DIFFERENT THAN TRADING REAL MONEY. HYPOTHETICAL RESULTS ARE NOT REAL RESULTS. PLEASE CONTACT YOUR BROKER ABOUT THE RISK OR TRADING STOCKS, OPTIONS OR FUTURES. ALL COMMUNICATIONS ARE OPINIONS NOT ADVICE.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Blog

Bulls Stall at Resistance/ Gold Tanks

CFTC Disclosure: