Pre-market analysis for November 25, 2008
Good news is, the e-mini S&P futures has moved up overnight. Bad news is, it’s still resting on the lower end of a slightly up trend from last Thursday’s 95 point rally. For a confirmed follow through, we need to at least break above the 870 level during market hours. If S&P do break above 870, then my target is 920 and possibly 940, the upper range of this uptrend. However, and it looks like a distinct possibility from here, if we break below 845 / 836 (200 bma) today, then 800 is an obvious target. Breaking below 800 would mean 770 is in the works. A bear trap / bull shakeout could also occur at the 820 level, that would be the line in the sand for a rally or breakdown for the intermediate term.
e-mini S&P 500 futures
US Dollar Index is in a slow downtrend as we speak. We could retrace to 87.20 and then head back down to 85.70. Breaking below 85.70 without retracement would be a strong sign of this breakdown. Moving above 87.0 at this point would be signs of strength. So I would watch the action above 87.0 and below 86.0 today.
US Dollar Index
Lastly, gold is still in a strong uptrend. Breaking below 795 would signal caution to a big retracement or even a downturn. Otherwise, a steady rise from here would be healthy. Breaking above 820 and taking out yesterday’s high of 831 could become explosive to the upside.
Gold
It’s interesting to see all three of these markets trading in a textbook-perfect range. It’s difficult to tell rather we’ll move up or down in the S&P at the moment. If we are stuck in a trading range today, which I think is the most likely to happen, then I’ll be looking down below.
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