Pre-market update:

  • Asian markets traded -0.2% lower.
  • European markets are trading 0.6% higher. 
  • US futures are trading 0.3% higher ahead of the market open. 


Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), International Trade (8:30), Redbook (8:55), Treasury STRIPS (3)

Technical Outlook (SPX):

  • Entering into today, SPX is down 5 out of last 6 sessions and needs to bounce here. 
  • The problem for the bears is 5 days with minimal losses in total, indicating little fear in this market and a likelihood that this is a mere light volume pullback and nothing else. 
  • The 10-day moving average going forward shouldn’t be relied on much as numerous failures has plagued it without any support since December. Let it re-establish itself as a support overlay before considering it again. 
  • Any bounce here today should have the opportunity to see a strong rally. 
  • Slightly outside of overbought levels on SPX. 
  • VIX continues its drop closing  yesterday at 13.55 and diverging from the index. 
  • VIX has been great of late for using divergences to market reversals. 
  • 1809 going forward becomes the critical level in the short-term that the SPX must not drop below. 
  • January is starting off in much the same way as December 2012 did – so keep that in mind. 
  • Volume totals over the past two weeks has been unbelievably weak especially when compared to historical volume patterns. 
  • Trend-line support off of the October lows lies at 1795.- and currently out of reach for the bears. 
  • There is absolutely no reason at all to be net-short this market. 
  • Markets don’t care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 

My Opinions & Trades:

  • Sold RCL at 46.72 for a 5.1% gain. 
  • Sold TRMB at $33.83 for a 2.1% gain. 
  • Added at 36.24 yesterday. 
  • Added GT at 23.81 yesterday. 
  • Remain long FLS at 72.25, EWBC at 34.52, JDSU at 13.00.
  • I expect to add 1-2 new positions today. 
  • Long 50% / Cash 50% 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 1-7-13