S&P 500 Futures forecast for the week of December 17, 2012, Technical Analysis

The S&P 500 futures initially rallied for the week over the previous five sessions, but found far too much resistance at the 1440 level in order to push prices back down enough to form a shooting star. This shooting star sits just on top of the 1400 level; an area that we know is significant in this market. Because of this, it looks like the markets are confused based upon the two preceding hammers and shooting star that we have just formed.

As far as longer-term trader concerned, it’s probably going to be very difficult to do so until next year as the liquidity starts to dry up over the next two weeks. Also, you have to keep in mind that this market is being held hostage by the fiscal talks by congressional members in Washington DC. This situation like this, it is almost impossible to come up with a nice long-term trading plan. However, if we had to place a trade, we think this market will go higher eventually. The biggest problem of course is that there could be a lot of volatility between now and then.