Pre-market update:

• Asian markets traded 0.2% higher.
• European markets are trading 0.5% lower.
  
• US futures are trading 0.4% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7:30), EIA Petroleum Status Report (10:30), FOMC Meeting Announcement (2)

Technical Outlook (SPX):

• Heavy, heavy sell-off yesterday that may have started the fifth reversal of the month of January. Insane for traders trying to find a consistent trend to take advantage of. 
• Apple (AAPL) earnings last night provided at the least, a temporary halt to the selling with a huge beat.
• Potential inverse head and shoulders pattern forming on the daily SPX chart. Above 2064 would confirm this price pattern. 
• FOMC statement comes out this afternoon, and this could provide an additional amount of volatile price action. Beware of moves and counter moves. However, of late,  the counter-moves have not been as strong and have often times stuck with the original move. 
• Yesterday’s sell-off and macro events world-wide likely means that the Fed will be very choice with their words and go the extra mile to not aggravate the markets with the language in their statement. 
• Despite a huge sell-off, VIX finished well off its highs of the day – up 11% to 17.22. 
• T2108 (% of stocks trading below their 40-day moving average) suggests that the selling wasn’t as strong as the indices might have indicated – it only finished down 3.5% down to 51.48%. 
• A move below 1988 would spell bad news for the bulls and create a new lower-low in the market. 
• SPX managed to break the 5, 10, 20, and 50-day moving averages yesterday with no support underneath. 
• On the spectrum of trade-able markets, January will rank as one of the most difficult types you can experience as a trader. 
• 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:

• Did not add any new positions yesterday. 
• Closed out of PEP yesterday at 95.43 for a 2.8% loss. 
• Will watch the market early on this morning before adding any new positions. May be the only feasible action is to sit on one’s hands today. 
• Remain long CTSH at $55.30, BSX at 14.54, ALL at 71.32, IRM at 40.64, HAL 41.24.
• 50% Long / 50% cash. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: