On Nov 21, 2010 I wrote that the market should find some near-term support in the 1175 area and I had expected the market to the highs of the year (1220-1230) in the near term. The S&P500 did exactly that and have been able to rally more than 3% in the last two trading sessions. At the time of writing (1:00 PM on Dec 02, 2010) the index is at 1218-level, very close to the resistance. Please watch this level carefully. A breakout above the 1220-1230 area could trigger further year-end rally. On the flip side, a pullback from this level will take us back to the range-based trading. If you do not want to trim your long exposure, you may buy protection for cheap now (the VIX is trading at 19.38 at the time of writing, down from ~ 24 in just 2 days of trading).
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