The green lines remain unchanged, but we had to add the yellow to account for the low volatility.  Support lines are drawn in horizontally.  We will be back tomorrow morning with an abbreviated morning report, but will return fully on Monday.

The Precise Take – The drift higher continues

Leaders Analysis:   The leaders are quiet overnight and relatively unchanged from yesterday.

Medium Term Analysis:  The S&P 500 cash index will likely open at or very near the 50% retracement of the entire down move that began after the high was made in October 2007.  The ES’ 50% level is just above at 1126.25, and there are a lot of long term traders that will sell into this setup with size.  When SPY reached its 50% level on December 4, the day ended down, followed by two more down days.  The bullish seasonality could temper the reaction, however, longs should exercise caution as a down move could feed on itself despite the recent low volatility.  Also, the 30 Year T-Bond yield is quickly approaching levels that will make next week’s Treasury auctions in the 2, 5 and 7 years expensive for the US (the amounts will be released today).  With the situation of certain EU states still in flux, the markets remain vulnerable to news shocks.  While short term new highs are still in the cards, swing and position longs would be well advised to watch their stops and consider the risk of holding over the three day weekend.

Trading Today:  The ES should gap up again and, on the 8:30 am report found support at yesterday’s high of 1115.75.  The projected range is…

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