Hey guys, I hope everyone had an awesome weekend. Let's get right into today's analysis:
US Futures managed to stage a notable rebound on Sunday night, after an ugly close on Friday when the bulls lost key weekly, and monthly supports. We were up about half a percent into the US cash open, but have since erased most of the overnight gains. Circling the MSM today are interesting headlines about how the Trump administration is distancing themselves from Syndey Powell, who is apparently getting ready to drop a "bombshell" voter fraud lawsuit against Georgia as early as this week. I suspect Trump and his team are trying to create the illusion of distance here so the case seems as independent and unbiased as possible. I wish them luck with that. We're also seeing headlines about more "Vaccine Hopes," which just puts a smile on my face everytime I see this price action narrative. Wash, rince, repeat...
In a recent report, JP Morgan analysts, off the back of Goldman's recent report on month-end rebalancing (of over $35 Billion), say they're anticipating an even larger and more vicious sell-off into year end. They're expecting a correction, which they say would position the FED for further easing/dollar debasement into 2021. Total forced selling by year-end is estimated to be over $300 Billion according to the report. Imo this could bring the entire house (of cards) down, with market depth currently the worst it's been since the March crash.
SPY is looking particularly fragile today as the bears continue to defend the long-term (megaphone) trendline. But, we all know the bulls are not going anywhere. I suspect if we successfully fill any of the gaps above this week, it will be quickly met with relentless miracle bids. That's not necessarily a bad thing, as the increased volatility could set us up for some fruitful short-term trading opportunities heading into December. I'm watching the 355 level as daily support, as I'm seeing us skipping on top of an ascending triangle formed from the Nov 5th high. If we lose this level, we may see a sharp sell-off down to the 350 area, where the first gap is sitting, along with the top of the previous triangle, and the 21 day EMA at 351.07. That's pretty heavy support, but it's not exactly a stone's throw away from current levels...
Stay tuned for live updates throughout the day, and sincere thanks for your viewership guys, I appreciate all the support. If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.