The official EminiForecaster forecast for the trading week ending September 24th is now posted.

There are no changes to the forecast. We expect the market to rise next week all week.  This will likely occur following some consolidation earlier in the week.

As previously mentioned, it is suspect that we are trading in such a tight range without much in the way of directionality.  Quiet periods are typically followed by volatility.  This period of the year is often the most volatile with the annual lows often coming in at or about October 17th or so.  This month, we are finding ourselves in the middle of the annual trading range. Out of the money call option premiums on the S&P are selling at very low prices. At the same time, In the money calls are selling at a premium to puts.  This says bets are on the  upside, which is bearish as the majority is usually wrong.  These are fairly bearish near to mid-term indications.  Another factor that looms in the shadows is the extreme absence of liquidity available to fuel a rally.  So, unless the government is stepping in to push things up, there is fairly strong probability of a downward bias in the weeks to come.

As a result of the above, though the cycle this week is up, we must be very cautious about managing our risk exposure on up-cycle weeks on the forecaster.

We expect therefore, that the market will continue in a sideways fashion largely in the coming week. If we break key areas of support and resistance on any volume and/or on a closing basis, then, a continuation of the breakout would be expected. Key areas are the 1122-1125 area to the upside and the 1100 area to the downside.  Beyond that, the 1140 area and 1080 levels are key.  These levels will also be posted on the forecaster on the horizontal tool function.

Manage risk prudently, sell near highs and buy near lows when at all possible, and keep exposure minimized.

Wishing you the very best,

Rob, Vadim & Staff