S&P and NASDAQ Post Weekly Reversal Tops
Investors continued to dump higher risk assets today triggering weekly closing price reversal tops in the December E-mini S&P 500 and the December E-mini NASDAQ. A follow-through break to the downside in both of these markets next week will confirm the reversal top and lead to the start of a 2 to 3 week break.
The trend may turn down on the daily chart, but the weekly charts still indicate that the main uptrend is still intact. A break though 1026.00 will turn the main trend down on the S&P weekly chart. The current pattern suggests that a break to 1069.00 is likely this week. A trade through 1650.25 will turn the NASDAQ contract lower on the weekly chart. The current set up points toward a test of 1732.00.
Despite the lower equity markets, Treasury Bonds couldn’t hold on to earlier gains and fell on profit-taking. Bernanke gave the green light for Treasury traders to continue to get long as he cited a weak economic picture as the main reason for the Fed to keep pressure on interest rates. Money leaving the equity markets and seeking safety also gave December T-Bonds and T-Notes support.
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