Yesterday's snoozy session ended with the machines trying to fill parts of the large open gap..but as one would have thought they failed as the S&P 500 closed the day right in the middle of its trading range.
We now still sit between two huge gaps (see chart below of the S&P 500 futures), of which one will likely fill in coming days.
Stocks closed up for the first day in six yesterday and as such remain in near-term oversold territory.
The S&P 500 formed a nice three day pattern which starting with Thursday's long red candle and yesterday's even longer green candle does give some initial hope to the bulls. What would be bearish really quickly and something we would short into is a close below 1155.
The Euro, oil, gold, silver, copper, and much else are at less interesting points technically than stocks are this morning…so we focus on stocks for now.
The Russell 2000 and Nasdaq 100 also showed some bullishness…chart of the Nasdaq 100 is coming up.
This morning we are looking for the morning gap to fill (if there is one by the time stocks open) and then will look for potential long entry signals in the price action.
We see 1220 – 1240 as a better resistance target on the S&P 500 than 1200 and while we see the downside risks we cannot discount a potential santa clause ramp higher into 1300.