from the trading desk of CFRN...
It appears to be a foregone conclusion by both institutional and retail traders that the upcoming pre-holiday trading week will be one of both low volume and low volatility. We have 2 thoughts on this.
#1) Earlier this year our Weekly Trading Zones had an average range of 100 points. The ranges have steadily contracted and this week we are down to a 26 point range.
#2) When everyone agrees on anything, you should prepare for a surprise.
Trade Alert For The Week of 12/20/10
Given the opportunity, consider buying the 1225 area on the March S&P Emini for a potential advance into the end of the year. If price spikes below 1225, we believe 1219/1221 should be final support. As always, trade with a hard stop in place. Because we believe 1225 to be a very important price, it may be tested several times before the advance gets underway allowing for additional confirmation via your own indicators or methodology before entering the trade. Remember, trading is risky and you can lose ALL your money.
Trading's not easy, but it can be simple!