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The long and the short of it:

It looks as if this market's rally is beginning to come to a had at these levels, as the market seems to be pausing before it makes up it's mind on where to go next. We had a "doji" on the chart and that is usaully a good indicator that a break-out is set to occur. We have been uptrending strongly, however, I think the market is just about due for a corrective sell-off. Nothing major, but a nice little shot in the arm that will test support around the 1179.00 area and 1163.00 below that.Everyone I have talked to in the past 2 weeks is saying the same thing, "christmas rally into the January effect should bring higher numbers in the market", sounds like a bunch of I better-say- something-somewhat-educated-so-I-sound-like-I-know-what-I-am-talking-about...to me! Everyone is on board for a rally right now, and we are beginning to pause at these levels...Today, I will look to be a seller at the R2 1197.00 level, and I will look to be a buyer at the S1 1185.50 area.

Daily Trade Set-ups:

SHORT SIDE ENTRY:

S 1 ESZ4 1197.00

B 1 ESZ4 1201.00 (PROTECTIVE STOP)

B 1 ESZ4 1189.00 (PROFIT OBJECTIVE)

LONG SIDE ENTRY:

B 1 ESZ4 1185.50

S 1 ESZ4 1181.50 (PROTECTIVE STOP)

S 1 ESZ4 1193.50 (PROFIT OBJECTIVE)

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Michael A. Cavanaugh

My Futures Online

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