S&P

Here is an hourly bar chart of the December S&P e-mini futures. I last commented on this market yesterday.

Remember that the March '07 contract becomes the front month contract tomorrow morning. March is trading 12 point over December so tomorrow you will have to adjust the price levels I cite today accordingly.

I thought the market had started a reaction from its 1417.50 high yesterday and expected a drop to 1405 or so. Instead we have seen sideways trading in a narrow range entirely above the last breakout point which is the 1411.25 high printed on November 22.

This is a situation in which the market is deviating from a short term forecast for a drop to 1405. Since the bigger trend is up in any case I am forced to conclude that the S&P's will advance to 1425 or so from current levels before a reaction of as much as 10 points develops.

My best guess as to the market's course over the next few days is illustrated on the chart above.