Market Will Trade Between the Low From Last Week and the All-time High

Posted 9:30 AM ET - Last week the market pulled back from its highs and it tested the breakout at SPY $219.30. That support level seems to be holding for now and stocks are poised to open higher. This will be a choppy week and we will stay between the low from last week and the all-time high. The FOMC meeting is nine days away and a rate hike is baked in. Traders will closely monitor the statement for any hints of future rate hikes. They are trying to gauge the timing for the next move. I expect to see nervous trading into the FOMC statement a week from Wednesday. Employment growth has been meager (176K) and we need to consistently add 250,000 jobs each month for economic strength. We are well below that level. With a new president at the helm, I believe the Fed will be cautious and the market will like the tone on 12/14. Any market decline into the FOMC statement will represent a buying opportunity. Seasonal strength will push stocks higher and the notion of lower corporate taxes in 2017 will attract buyers. I believe the next rate hike will be 6 months away at earliest. The market has no pace and this will be a choppy week. Consequently, I am trimming my size and my activity. I am only looking for a few good trades today. I will not trade the first 30 minutes. I want to make sure that this move holds. If the market grinds higher I will nibble on a few strong stocks. If the market drifts lower I will wait for support. I don't want to take long positions right out of the gate because I might get trapped if the market bid is tested. I do favor the long side. The Italian referendum yielded a "No" vote and that has fueled a small rally in Europe. Oil is higher and tech is higher. We have not seen that in a couple of weeks. Be patient during the first hour and wait for price confirmation. We need to know that the bid is strong before we start taking long positions today. . .

Daily Bulletin Continues...