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Tuesday, December 18, 2012

Daily update 12/18

SPX is above the trend line.  Here is the daily chart.

SPX now has a blue bar so price closed above the upper Bollinger band and is extended.  It is now in spitting distance of the highs.  I believe the move the last two days is based solely on hope for a deal in Washington.  Will we actually get one or is this all just talk to make it look like we are going to get one?  I don't know how to predict that or to predict what sound bites are going to come out of Washington that might affect price.  We are overbought to the point that most of the time we would see a pullback.  Lets zoom in to the 195 minute SPY chart.

SPY has blue bars on this time frame as well as the daily chart.  I don't know what else to say other then price is extended.  I guess we will see whether that means anything or not.

Clearly the market is pricing in a deal.  I am still not sure we will get a deal.  How much further the market goes up would only be a guess.  I think if a deal is done it will be a sell the news event with SPX near the highs.  At some point the market could get worried about a deal not being done again and sell off.  I see no way to accurately predict any of these events.


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