I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Monday, December 21, 2009

Jingle Bells, Batman Smells

Wow, silly season really is in full swing. But instead of being wildly bullish, the market is just focusing in on that range and compressing on that pivot line.

So first, here is the overnight action so far. I have an updated Dollar count and another look at the ES. The action is looking mighty triangle-y to me (more in a minute).

So like I was discussing this past week here, Update on Minor Degree Count Options we are range bound, and until we break out, there is no way to know what the count is.

I see 3 main options like I talk about in the post: 1) Ending Diagonal, 2) Expanded Flat, 3) Large Triangle

What is interesting about the action on the futures is that the bottom trendline for the diagonal is now practically horizontal. So I think that option is now much less likely. Based on the current pattern, Kevin's large triangle looks very promising. Everything is just compressing about the 1100 pivot (like in this chart from Friday):

**However** until there is a breakout of this range this could morph into something completely different. Caution is still definitely warranted.
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