The U.S. Dollar rallied for the fifth straight day and equities fell for the fourth straight day as investors blew out of higher risk, higher yielding assets.
Equity markets fell sharply as traders are cashing in on the six-month rally on the perception that central banks may begin to pull out of their stimulus programs. A weaker than expected new home sales report also encouraged selling pressure as traders are now beginning to fear the possibility of a double-dip recession.
The December E-mini S&P 500 took out a key retracement area at 1056.75 to 1047.00. This area is likely to become new resistance. If the market can regain this price zone then look for the start of a vicious rally to 1070.00. In my opinion, there is still one strong rally left in the tank as bearish traders will want to get short at a higher price by setting up a secondary lower top.