SPY (17 Dec 2008)

The S&P Futures throughout the asian and european trading session were lower than yesterday's closing price. At one point it was more than 20 points lower.

Where this market is headed to this morning depends on how we open the trading session.

As of now the SPY is in overbought territory, so I wouldn't be surprised to see a retracement of up to 50%. It all depends on the buying momentum of this rally, overbought
conditions does not mean that the market cannot keep on rallying.

So the first sign that I am looking for is how big the gap down or gap up is going to be...and then I will make the necessary adjustments to my trading plan.

If we break 91.96 today, this rally can continue higher to 93.30 then 94.95. If not I am expecting SPY to close unchanged and continue lower tomorrow...hence continuing to trade in a range of 82 - 92



I am keeping my watch list smaller due to the fast paced market:
Possible Shorts: GS, IWM, ERY, FAZ
Possible Longs: GS, IWM