By Dominic Picarda.
While traders often casually refer to any upside that happens in the month of December as a “Santa Claus rally,” that name strictly refers to gains in the festive week itself. Early December, by contrast, has often seen the indices give up ground, rather than capturing it. My stance on the stock markets remains positive for now, although I am a little cautious given the stretchedness of the DAX’s up-move, as well as the limpness of the FTSE. The S&P looks the best of the bunch, in my eyes.
S&P 500
I have been arguing that the S&P’s sideways grind was likely a pause ahead of further gain. That’s still the case and I see the index as a very interesting prospect right now, being neither as stretched as the DAX nor as beaten up as the FTSE. An attack on 1845 is next up, I reckon.
Support: 1797.2– Resistance: 1888.1
Support: 1782.1 – Resistance: 1845.0
Support: 1767.1 – Resistance: 1827.1
Support: 1740.7 – Resistance: 1807.2
DAY: Stay long or buy a rally back through the 13-fourhourly EMA.
POSITION: Stay long.
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader