S&P Remains Range Bound

I am still not as sold as everyone else over the move today (although the futures sure look great as I write this). We are still range bound with strong resistance lingering overhead (1490 in the S&P). Until the S&P can make a move above that level and sustain itself there I am not confident in a sharp move higher. Of course all of this speculation will end shortly and no one really knows what is in store for the future. What we can decipher from the market is that nothing has changed. A nice move today, certainly, but we saw something similar to this a few days ago and the gap closed several trading days later.

As I stated in my prior post the market is faced with the following over the short-term:

According to the Stock Trader’s Almanac Thursday and Friday of this week are historically bearish. Only 33.3% and 38.1% of the trading days finished in the black on the S&P.

Not that I use the aforementioned as a sole reason to place a trade. Just food for thought.

Couple the short-term seasonal tendencies with the S&P back near strong resistance at 1490 and I think we could see a pullback over the next few days.

Also, the gap today in the S&P did not close which often weighs heavily on the market over the short-term.

Basically, I think we vacillate around in the 1440-1490 area until the Fed decision Dec.11.

Overbought/Oversold for December 5, 2007

S&P (SPY) - 64.2 (neutral)

Russell 2000 (IWM) - 57.6 (neutral)

Dow (DIA) - 66.8 (neutral)

Nasdaq 100 (QQQQ) - 63.6 (neutral)

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