SPY may not break above 920 (12 Dec 2008)

The Auto bailout failure and JPM CEO statements caused the markets to tank. Prior to these events, I still see stocks trading in a range.

In the morning, I was going long on GS after a pullback and a 2nd attempt to breakout. Even though the volume was impressive, it was a fake break out. From then on I switched to bearish mode by looking out for any potential breakdowns in the stocks that I am watching today...primarily GS, POT.

I think SPY is highly unlikely to breakout above the 920 level. Which MM would risk their money to do such a thing? In the event that there is a 2nd attempt to bailout the Auto makers...I expect just a moderate rally...simply because there are so many resistance levels above us now....and heading into middle of December keep an eye on more Hedge Fund redemptions.

The key resistance levels after yesterday's events are 85.71 and 88.45
Breaking below resistance 83.43 will see SPY heading to 81.63.


Here is a more detailed chart of my trading plan. Notice the number of resistances overhead, we will need a very powerful rally to overcome all those. Note the possible reversal point in the event that you wish to go long for a scalp...?