Pre-market Analysis December 1, 2008

Last week's rally in S&P still haven't broken the big downtrend from Sept/Oct yet. In fact, we just tested the top of the trend and bounced back perfectly. If we break below 860/850 on the S&P 500 today, then I'll be looking down for the day. Breaking above 895 would be a great sign. And staying around 890 would be good too, as it shows we're at least able to hold on to the gain.

However, do note that after such a quick rally last week. It is entirely normal to retrace back to load the gun. I plan to hold on to my intermediate term longs today.

The Asian market are all red overnight, except the Chinese markets. Shanghai (+1.25%), Hang Seng (+1.59%), and Taiwan (+1.30%) managed to stay just above even. As the Chinese market is very important in the global recovery, things aren't all bad in Asia last night. However, I would simply read this as a neutral sentiment as everything else were down as I said.

[caption id="attachment_943" align="aligncenter" width="500" caption="S&P 500 futures"][S&P 500 futures][][/caption]

The US Dollar Index is bouncing back up again. However, it is still within the downtrend we're in. I wouldn't worry too much until it breaks 87.50. If that happens, it would be another sign this rally is losing steam.

[caption id="attachment_944" align="aligncenter" width="500" caption="US Dollar Index"][US Dollar Index][][/caption]

Gold is retracing after the speed climb last week. I would watch the fibonacci retracement level at 50% (780) and 62% (770) for important signs of retracement confirmation.

[caption id="attachment_945" align="aligncenter" width="500" caption="Gold"][Gold][][/caption]

[S&P 500 futures]: http://traderpau.files.wordpress.com/2008/12/2008-12-01-es.png [US Dollar Index]: http://traderpau.files.wordpress.com/2008/12/2008-12-01-dx.png [Gold]: http://traderpau.files.wordpress.com/2008/12/2008-12-01-zg.png