Pre-market update:

  • Asian markets traded 1.4% lower.
  • European markets are trading 0.3% higher.
  • US futures are trading 0.2% lower ahead of the market open. 


Economic reports due out (all times are eastern): MBA Purchase Applications (7), Quarterly Services Survey (10), EIA Petroleum Status Report (10:30), Treasury Budget (2)

Technical Outlook (SPX):

  • A huge show of strength yesterday as the bulls managed to wipe away 20 points of losses on SPX and finish just a fractional point below break even on the day. 
  • Surprisingly, by the close, SPX was trading above the 20-day moving average. 
  • VIX still managed to finish 4.8% higher at 14.89.
  • SPX has managed to come a little bit off of oversold conditions on Stochastics. 
  • Despite being in consolidation pattern for all of 2014, the price action of late in the Russell index looks extremely favorable. 
  • Price action yesterday is nearly identical to the bottom that was put in on 10/15 and then going on a 250 point rally thereafter. 
  • Don’t be surprised if the previous two days of trading was a mechanism for washing out the weak hands in the market before ultimately going on its traditional Santa Rally. 
  • 2050 as mentioned in previous trading plans is a key support level for SPX, followed by 2030. 
  • Next key support level is 2030 – if broken, we could be looking at a similar market to what we saw in September and early October. 
  • By breaking 2050, SPX will create a short-term double top in the market. 
  • Double top on SPX 30-minute chart is still in play here. 
  • 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 3 new long positions today. 
  • Stopped out of TEVA at 56.4 for a 1.7% loss. 
  • Stopped out of HOG at 68.14 for a 2.8% loss. 
  • Stopped out of CBS at 52.75 for a 3.8% loss. 
  • Will consider adding 1-2 new positions today. 
  • Remain long GLW at 21.20, IBM at 163.94
  • 50% long / 50% cash. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 12-10-14