Market Analysis for Dec 3rd, 2004

Although the E-mini December S&P made marginal new highs today at 1198.50, the index is trading around 1190/91, which is where it traded for most of yesterday, and on Wednesday... and come to think of it , where it made its mid-November high (1189.25)... Every time the E-SPZ attempts to move to the upside away from 1190-- towards 1200-- it has failed. On the otherhand, every time it tries to sell off below 1187-1186 or so, selling pressure dries up.

And while this dance goes on between 1200 and 1186, my underlying near and intermediate term indicators continue to deteriorate, suggesting to me that the price action is sucking into the market more and more bulls, right at the same time the engines of power one by one are shutting down.

I dont know how much longer this type of divergence can continue... but right now, even if short positions are premature, taking profits on long positions would appear to be the prudent course of action (for anyone who is carrying long positions in equities)... With that in mind, have a look at my updated daily chart analytics of the E-SPZ...

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