Maybe Wait
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Futures and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .50 points lower and the bond market is trading down 1 tick.
The stock market remains overbought based on the CBOE VIX Indicator [$VIX.X>$VIX.X]. This suggests that it is due for a correction (creating a possible shorting opportunity). However, it has begun to walk off that condition based on the advances/declines and sideways action in the December S&P futures [SPZ9>SPZ9]. Therefore, you might want to wait for this situation to resolve itself, especially with light pre holiday trading before attempting a position here.
March Bonds [USH0>USH0], on the Pullbacks Off Highs List, sold off early today but reversed to close well. This suggests that the bigger picture cup and handle pattern is still intact. Look for a buying opportunity here.
February Live Cattle [LCG0>LCG0], on the Pullbacks Off Highs List, closed well today and look poised to challenge their old highs.
March Cocoa [CCH0>CCH0], mentioned last night, hit 10-day highs today but failed to close near those levels. This suggests that longer-term downtrend still may be intact. Continue to look for a possible shorting opportunity here.
Best of luck with your trading on Tuesday!
Dave Landry
PS-Reminder: Protective stops on every trade!