This Week's Trade 12/8

This week I am looking for a decisive break of the SPX and close above 900. If we can close on the day over 900 then that would get me much more bullish into the last few weeks of the year. I think with a strong close over 900 we may run clear up to the low 1000s in no time. Sunday night the futures are already printing 895 and if this stands it looks like we will gap up strong in the morning. After the first few hours we should be able to see if the gap gets filled half way or fully. Either way I'll be waiting for a close above 900 to confirm a rally. Underneath us we could revisit support in the 850s. Below that we really must hold the 820 area because if not then you'll start seeing some more ugly action.

Economic data this week to watch for includes Tuesday's Pending Home Sales, Wednesday's Wholesale Inventories. Thursday we get Initial Claims and Trade Balance. Friday brings PPI, Retail Sales, Business Inventories, and Sentiment.

Overall I think it is crucial to wait for a close over 900 on the SPX to confirm the bullishness in this current rally. Lots of shorts are still waiting to cover in this market and a close over 900 could trigger just that. The large falling wedge would also be broken out of above that level. Of course we can still pullback a bit into the current pattern and consolidate a bit longer but I think something is building here that you cannot ignore. Again watch 900-915 to confirm strength this week.