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Christopher Lewis
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The S&P 500 Index futures fell a bit on Wednesday in order to retest the general vicinity for support. There was no serious meltdown, so it does look like we are still somewhat supportive and bullish at this point time. However, we do see the possibility of further declines going forward, before significant support steps into the marketplace in order to push prices higher.

We think this is an upward fight, meaning that the grind will of course take its toll, but in the end the market should close higher the longer we get along. We still see the 1460 level as a potential target, and because of this we are buying only, as the support is not only strong below, but rather choppy.

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We have to admit that the real driver of this market will more than likely be the talks going on between Congress and the President in Washington DC. The so-called “fiscal cliff” talks continue to drag on in DC, and the markets tend to move at every announcement that comes out. The later we get into the year, the more a fact they will have on the markets as headlines crossing the wires. After all, we have only 11 days left before the automatic sequestration takes place in America, and this will throw the economy into another recession if it’s allowed to happen.

In a world that sees the US as one of the strongest markets right now, a recession would be horrible for global asset prices in general. The S&P 500 will of course be no different, and we could see a significant selloff if they don’t pull it together. This market did start a selloff late in the day, and it does appear that the market is trying to let Washington DC know what it thinks, and right now it does not look like traders are as confident in a deal as they once were. Because of this, we could have seen the highs until we get some type of good news again. Until that headline comes out, it’s going to be very difficult to buy this market, but selling has far too much noise below it in order for us to do so as well. Prudent traders will more than likely simply stay out.

 

S&P 500 Index Futures Forecast December 20, 2012, Technical Analysis
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