So far you have to be impressed with what the market has done off the mid November lows. After the typical knee jerk oversold bounce, the indexes have been "clearing and holding" if you will – taking one level, basing and resting for a short period, before assaulting the next level. The first area that gave trouble was this 1409ish on the S&P 500 which was the 50% retrace of the entire two month drop. That served as a ceiling for a few days but Wednesday's sharp intraday reversal served to clear that marginally. That was followed by yesterday morning's gap up, which was sold off on Boehner's comments but as importantly bought aggressively after the gap filled. Today is just a simply consolidation day despite Obama (and apparently more Boehner comments coming).
At some point the market should accept these comments as rhetoric and realize the can will be kicked. If it takes til Dec 21, Dec 31, or Jan 15 I suppose will have some impact but there is an obvious glidepath. So it will be interesting to see when the market shakes off politician talk – pro or con – as eventually you can only hear the same thing so many times, before you become immune to it.
At this point Wednesday's low at 1385 is a good line in the sand for the bulls to observe, whereas those mid 1430s are going to most likely serve as some serious resistance. But at this point it appears the market is building up reserves to try to get through this descending 50 day moving average.
One positive for the bulls is (doctor) copper FINALLY woke up after sitting out the first two weeks of the rally…
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