Anyway, the way the market acted today and so far this week really means little to next week. Once we stayed over the pivot point for today the market just seemed to melt up and it was a great trade to buy the 50% retracements that occurred at key points throughout the day.
Oil was up huge but it doesnt matter because the volume was so thin so the boys at the Nymex just pushed it thru the roof to their liking. The curve is still in contango, meaning the back months in oil futures contracts are priced much higher than the front month. Even today the back months rose higher than the front, thus I would expect crude to fail and continue back below 40 next week.
I am keeping my eye on Gold as it looks like the metal wants to breakout of its long consolidation its been in since topping last March over $1000. Gold ran up 20 bucks today to close near 880. This is after an almost perfect technical 50% retracement the last two days of its previous advance last week. If gold holds current levels and gets over 900 on volume I would be a buyer of GLD for sure. Would not surprise me to see gold as one of the early surprises of 09.
Overall the SPX is pretty much right where it was a month ago and we are surely looking for an expansion in volatility come the new year. However direction is still uncertain. But I gotta say that as long as we stay above that 850 level in the SPX then we will continue to grind higher.
Happy New Year.