Pre-market update:
- Asian markets traded 0.1% lower.
- European markets are trading 0.5% higher.
- US futures are trading 0.3% higher ahead of the market open.
Economic reports due out (all times are eastern): None
Technical Outlook (SPX):
- Doji candle formed on Friday, and very mild follow through for the bears.
- Strong indication that a dead cat bounce is likely looming around the corner.
- Dead cat rallies can go hard and strong for 2-3 days without subsiding.
- Volume has picked up in a big way for the past two days.
- Long-term trend-line in place that started off of the lows from November 2012, is still in place, and could be tested at 1901 if the selling were to continue.
- SPX extremely oversold and indicators such as the T2108 (% of stocks trading above their 40-day moving average) are showing strong indications the market is ready for a bounce.
- While on the surface it may seem logical to get short on this market, the fact is, risk has expanded greatly to the short-side and the risk of being caught in a dead cat bounce is very strong.
- VIX rose 27% to 17.03.
- The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up.
My Trades:
- Added two new long positions on Friday.
- Closed out MS at 32.10 for a 2% loss.
- Will consider adding additional positions if the dip buyers come back into the market today.
- Remain long EBAY at 51.75, HPQ at 35.61, GPK at 12.00
- 50% Long / 50% Cash
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
