By Dominic Picarda.
As I pointed out on Monday, early December is actually not always such a great time for equities. Traders tend to group it together with the festive frolics that customarily occur later in the month, but this is plainly misleading. The selling that came yesterday was a reminder of this tendency towards weakness around now. However, my overall stance towards stocks remains bullish, as I think the markets will rally once more very soon. Meanwhile, gold has sagged once again, bang in line with my call.
The S&P’s decline from its latest record high has been orderly. True, the 21-fourhourly EMA might be about to cross the 55-fourhourly EMA, which would turn me neutral for now. But I don’t think it’ll be long before the party resumes and 1845 is seen.
Support: 1782.1 – Resistance: 1845.0
Support: 1767.1 – Resistance: 1827.1
Support: 1740.7 – Resistance: 1807.2
Support: 1729.1– Resistance: 1797.2
DAY: Buy a rally back through the 55-fourhourly EMA
POSITION: Stay long, but exit on a crossover of the 21- and 55-EMA’s
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader