Market Analysis for Dec 20th, 2004

Off of its recovery high this AM at 1206.75, the E-mini March S&P swooned to test the 12/09-12/17 support line at 1198, which was pierced for an instant, but has managed to contain the weakness thus far. The E-SPH has carved-out a new, lower 10 point range between 1196 (roughly) and 1206 (roughly), within what I will term a "rolling top" formation that has entered its second week. At break either below the 1196-1195 support area, or above the 1206-1207 resistance zone should trigger at least a 5 point move in the direction of the breakout. As of this moment, because my intermediate term work leans to the downside, I have to believe that all rallies are opportunities to liquidate long positions, and-or oppportunities to establish hedge or short positions.

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