Market Update - 12/10/2009

Dow Jones Industrial Average: +68.78 or 0.67% at 10405.83

S&P 500 Index: +6.40 or 0.58% at 1102.35

NASDAQ Composite Index: +7.13 or 0.33% at 2190.86

NYSE Internals: 1829 Advance. 1209 Decline.

US Dollar: -0.085(0.11%) at 76.340 | Crude Oil: -0.19(0.27%) at 70.48

Gold: +11.80(1.05%) at 1132.6 | VIX: -0.33(1.46%) at 22.33

Stocks rise after Trade numbers.

So far, both of my counts are playing out pretty well. As I said yesterday, look for a test of that 1110 area. We made it to 1106 today, then backed off a little bit. I had also said that we will break back above 1100. We did, and held it for most of the day.

The market is still in the tight range, and is still very choppy. For most of the days in the past month, we have made our highs or lows very early in the trading session, and have bounced around that level for the rest of the day.

For right now, I think 1095-1100 may hold as support, and 1110 will continue to be resistance. Breaking back below 1083 may trigger a larder sell off. And breaking above 1115 will most likely take us to new highs. Either of this could happen tomorrow with some key Economic Indicators releasing. Retail Sales, Consumer Sentiment, Import/Export Prices and Business Inventories are all due out tomorrow morning. Retail Sales will definitely drive this market. It is very likely that tomorrow could be the day that we break out of this range.

This daily chart shows the tight narrow range we have been in for the past month. On a closing basis, we have virtually gone no where. There is very heavy resistance right above 1110, with the upper Bolligner Band coming in at 1116, and the 50% fibonacci retracement at 1121. Right in the middle of the range, we have the 20 day simple moving average, and the 5 day simple moving average. And directly below us, we have the lower Bollinger Band at 1086 and the 50 day simple moving average at 1081.

Who knows how long it could take us to get out of this range. But the longer it takes, the bigger the move will be when we do break out. The longer we go sideways, the tigher the Bollinger Bands will get, and the closer in the moving averages will get. My wave counts from yesterday still remain the same.

Should be exciting to see how it all plays out!