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Today’s Trading Edge: E-mini futures on the S&P 500 index inched higher but was unable to take out record levels

Posted by WorldWideMarkets . on Dec 19, 2016 9:27:26 PM

WWM SP 500 DEC 19 2016.jpg 

U.S. equity markets climbed slightly higher as defensive posturing take form as year-end approaches.  US stocks pared gains following both incidents in Turkey and Germany.  In Germany a tractor trailer barreled into a crowded Berlin Christmas market, killing 12 and injuring 48 people.  In Ankara, Russian Ambassador to Turkey was assassinated at an art exhibit by a lone Turkish gunman.   The risk off move saw the yen rally 1.6% against the dollar. 

Low volume is likely to persist as we near this weekend’s holiday, but a pullback could accelerate if we see US treasuries continue to edge higher. 

The S&P 500 index futures daily chart shows the recent rebound has tentatively respected a bearish ABCD pattern.  Point D is targeted with the 141.4% Fibonacci expansion level of the B to C leg.  If we see a pullback towards the 38.2% Fibonacci level of the potential C to D move, we could see buyers come in and buy the dip.  If the bearish drop persists, we could see a pullback target the $2,170 level.  If the pattern is invalidated, further upside may target the $2,300 to $2,325 area. 

The trade: Buy E-mini SP500 at $2,220, with a stop loss at $2,210 and a take profit at $2,250.  The risk/reward ratio is 1:3

Topics: Stocks, US Market, US Stocks, US equities


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