S&P 500 Morning Analysis 12/2/09

The primary trend on the longer term timeframes remains higher which gives us reason to think that the recent consolidation/correction through time will resolve back to the upside, but will it pull back towards the 110.50 level before it can break out, or will it fail? We have to be prepared for any scenario, but the ideal one would be a pullback to 110.50-110.65 area (also location of 5 & 10 DMA’s) and then a breakout to new highs past ~111.80. Failure of 110.50 would confirm the range, bring the 109 support level back into short term reality and raise the possibility of failure here, but larger timeframes tell us to be prepared for upside.