Pre-market update:

  • Asian markets traded flat.
  • European markets are trading 0.4% lower. 
  • US futures are trading 0.2% lower ahead of the market open. 


Economic reports due out (all times are eastern): Jobless Claims (8:30), PMI Manufacturing Index (8:58), ISM Manufacturing Index (10), Construction Spending (10) 

Technical Outlook (SPX):

  • First day of the trading year and more importantly the first week of the trading year is typically an excellent barometer on the direction the market will take for the entire year. 
  • Also first trading day of the month of late has trended bullish for the markets though December bucked that trend. 
  • Volume totals over the past two weeks has been unbelievably weak especially when compared to historical volume patterns. 
  • If we do see a pullback here, SPX must hold 1809. 
  • We remain firmly entrenched in overbought territory – but history shows that it can remain their for extended periods of time. 
  • Tuesday saw price action break to new highs before a legit bull-flag pattern could emerge. 
  • VIX rose higher for the 3rd straight day to 13.72. 
  • Trend-line support off of the October lows lies at 1789 – 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 ICE at $224.10 for a 2.0% gain. 
  • Did not add any new positions on Tuesday.
  • Remain long FLS at 72.25, RCL at 44.46, TRMB at 33.15, LAMR 51.18, GPOR at 61.39. 
  • 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 1-1-13