Merry Christmas to everybody out there!
Expect very light volume today with no major moves. Looks like a modest gap up expected this morning, but I wouldn't guess there would be a large open to close move.
There are converging trendlines forming from the Oct-Dec high and Oct-Nov lows, indicating a possible large horizontal triangle formation taking place off the Oct low. Often times the upper trendline will be briefly exceeded before the "e" wave ends. I think we may see that here over the next few days, and then I expect renewed selling as we come out of the Holiday season.
The large, "smart-money" commercial traders have sold heavily at two distinct zones over the last year. The 1260 SPX level (which is basically the neckline of the head and shoulders top formation) and the 1320-1330 SPX level have been the areas where they have sold and would be expected to sell heavily and drive prices down again. Obviously we are in that 1260 area now, so it is possible that we are very close to seeing this rally attempt end.
All the best,
Pete
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