Things have worked out nicely for me so far in December as I was able to get fully invested in the cycle last week. The $SPY is right up against the 10/07-3/09 fib level for the third test since the 5th of November. I consider this a huge level for the broader market and expect to close above it by the years’ end. However, I feel as though the odds are greater for a pullback here and the actual break and sustainability occurring after opex.
In the chart below you can see that a decent sized channel is being formed between 123 and 120 with the 60-day midpoint providing support. I am looking for consolidation in this area for the next two weeks and wouldn’t be surprised to see an attempt to fill some gaps from the end of November.
Here is a look at the weekly chart with the potential targets that show it would be quite the show if the broader market were to break above and close above the 125 level. I attempt each week to see what the potentiality is for the market and create scenarios of what I’d do in those scenarios. As is right now I’m expecting a pullback and consolidation and will continue on with what I’ve been doing. If that changes, I’ll update.