Tuesday December 16, 2014 – Weekly Market Update

Since the S & P 500 failed to achieve the objective of
2,093.80 I had previously outlined, the markets have reeled and
sold off over 100 points. And this has only been since
December 5th.

In only eight days, the S & P 500 gave back 103.02,
assuming the low for today of 1,976.45 holds.

Not only that, but oil has continued it’s massive slide
and just today, the Russian government increased
rates 17% in an effort to support their currency.


What happened to the Christmas rally?

And what’s with all the chaos around the world?

I like it when you see market action like this.

Extreme moves lead to opportunity. You just need to be
able to pull the trigger.

You also need a framework to help you determine when
pulling the trigger is appropriate.

Let me give you an example.

The price level on Apple I have shared as a support price
should be $106.25.

This morning, Apple hit a low of $106.26 and reversed to
the upside.

As I write this, Apple is trading at $108.64. Or about $2.40
off the previously identified support price.

A move of $2.40 had the affect of moving the $106 weekly
call from a low of $1.91 to a high of $3.20.

That is a 67% return on a $2.40 move.

Not too bad for about an hour.

But, you needed to know the support price … and you needed
to confirm it with just one other technical set up. I will not
share that set up at this time, but it works pretty well!

I know this works because one of my short term trade group
members skyped me and told me he made an 11% return …
in about an 30 minutes.

He saw the set up and pulled out some quick money.

But, as I said before, you need to know what you are looking
for in advance, so that you can be prepared.

I typically do not make predictions, but one of the reasons
I held off from publishing this issue until today is because
I will make one.

My thoughts are that today the market will bottom and
you will see the Christmas rally everyone is talking about.

Here is why and here is the logic behind my prediction.

In a previous article, I mentioned how the S & P 500
had a capitulation day on October 9, 2014 and that
exactly four days later, the market bottomed.

That bottom saw the S & P 500 race up 259 points to a
new high.

On December 10th, the market had another capitulation day.
If the same pattern holds true, then the bottom should hit

Also, the specific price level I was looking for was 1,992.18.

Yesterday, the S & P 500 closed at 1,989.63. So, if the
S & P managed to close today under 1,992.18, I felt it
would continue to drop.

As I write this, the S & P is trading at 2,012.09 or about
20 points above the 1,992.18 price.

If the market can close above 1,9921.18, which at this
point seems likely, look for the Santa Claus rally.

I hope this has been helpful.

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