Market Analysis for Dec 6th, 2004

After rolling over into a nosedive that actually broke below Friday's "Employment spike low" at 1185.75, the E-mini December S&P stopped dead in its tracks, and has since pivoted to the upside for a return loop to 1190. The fact that the E-SPZ made marginal new reaction lows in the absence of downside follow-through argues from a micro perspective, that the decline from 1198.50 into 1185.25 ENDED that particular corrective downleg. The question now is whether or not the upmove to 1190 represents the beginning of a new upleg, or just an intervening rally ahead of more weakness that presses the E-SPZ into my preferred corrective target zone of 1181 to 1179? Right now, the "jury is still out," however my micro work argues for still more recovery rally, likely into the 1193 resistance area prior to the inflection point between a bull more or another downside pivot to resume the corrective process.

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