Pre-market update:

  • Asian markets traded 0.8% higher.
  • European markets are trading 0.7% higher. 
  • US futures are 0.2% higher ahead of the market open. 


Economic reports due out (all times are eastern): Treasury International Capital (9), Housing Market Index (10), E-Commerce Retail Sales (10)

Technical Outlook (SPX):

  • Another historical milestone will likely be reached today with SPX hitting 1800 for the first time ever. 
  • Some interesting behaviors can kick in when this occurs. Investors could decide that they’ve had enough and cash in their chips or become inspired by the headlines and suddenly more investors are joining the rally. I’ve seen both happen, so it is wait and see event. 
  • The rally off of the 10/9 lows remains strongly intact. I would look for an dip buy to be bought off of its trend-line which currently exists at 1775
  • Volume on Friday picked up some, and we’ve seen 3 solid trading days in a row. I’m skeptical that today’s market if it finishes in positive territory it will be anywhere near as large as the previous three days. 
  • It is safe to say that the SPX is overbought as well as the rest of the indices. But recent history shows that they can trade long periods of time in overbought territory. 
  • VIX continues to drop and is the lowest its been since early August at 12.19.
  • On the 30 minute chart 29 out of 38 candles have finished green – astounding!
  • Use the 20-day moving average as a barometer on the health of the market. As long as we remain above it, there is little reason to consider shorting 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:

  • I did not add any new positions yesterday. 
  • Sold CE at $57 for a 1% loss. 
  • My aim was to slightly diminish my overall portfolio exposure to the long side and remain more nimble. 
  • May add as many as two new positions today. 
  • Wait at least an hour after the market opens before considering a new position today. 
  • Currently 70% long / 30% cash.  
  • Current Longs: CHS at 17.30, MOS at 47.77, PAY at 24.97, GPC at 81.40, ETFC at 17.93, LLTC at 41.15, IR at 67.95. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 11-18-13