Watch For Soft Market Conditions This Week – Cash Is King

Posted 9:00 AM ET - The market has been struggling to breakout and tax cuts are the only possible catalyst into year-end. Excellent earnings and solid economic releases have not sparked buying. Bullish sentiment has been running high and we are likely to see a shakeout. The Senate and House will have to negotiate quickly. The holiday recess and the debt ceiling will hamper progress. I believe we will see a nice market pullback. Support is at SPY $255 and $250. I am not shorting, I am waiting for a buying opportunity to set up. The House has tentatively scheduled a vote on Thursday. Their bill is expected to pass by a comfortable margin. Swing traders should be in cash. The bigger the drop - the better the bounce. Let's hope for a nice pullback. Day traders should use the first hour high and low as a guide. If we are above the high, favor the long side. If we are below the low, favor the short side. Expect some selling this week. The market will find support when Republicans make progress. Seasonal strength will keep buyers engaged at lower levels. Be patient, cash is king this week. . .

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