But now, the Russell 2000 has accomplished another objective: the filling of its Nov. 19 gap at the 769.50 level. After stalling there on Wednesday and Thursday, it popped above this level Friday morning (Nov. 30), then closed below it. To signal a further recovery here, we need to see a close above the 770 level. Till then, rallies must be considered suspect, and I will continue to cut back in bullish positions as the market stalls in this area.

Russell 2000 Marking the Bottom

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S&P 500

As usual, the S&P 500 is playing a major role in weaving this tapestry of retracement patterns. Here, in the short-term chart below of the December S&P, you can see how the contract has stalled at its recent nemesis -- previous support now turned resistance -- at the 1495 level. It's no coincidence that this level has once again gotten the attention of the market. This area marked sextuple support before and now has morphed into resistance.

For the very short term, note that Friday's opening pop left a gap at 1471.40. After the early rally stalled at 1492.00, it pulled back into the gap and bottomed at 1473.00. This morning, the S&P pulled back to the top of that gap, bottoming at 1473.50, just half a point above Friday's low (the top of the gap).

That gap is now short-term support. A pullback into the gap that found support near the 1471 level would represent a short-term buying opportunity. But a break much below 1471 would suggest more weakness ahead. On the upside, there remains the unfilled gap from this morning at 1483.70. That gap is likely to get filled over the near term. But if the S&P stalls at the top of the gap and begins to pull back, that would probably be a sign of another short-term top, because another retracement pattern would be completed.

S&P Futures Running into its nemesis at 1495

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