Pre-market update:

  • Asian markets traded 3.5% higher.
  • European markets are trading 0.6% lower.
  • US futures are trading 0.1% lower ahead of the market open. 


Economic reports due out (all times are eastern): PMI Manufacturing Index (9:45), ISM Manufacturing Index (10), Construction Spending (10)

Technical Outlook (SPX):

  • Any notion that we were still in a downtrend was effectively ended on Friday. 
  • Bank of Japan introduced its own form of quantitative easing, and thereby sending US indices to new all time highs. 
  • The only argument the bears might have at this juncture of the market rally would be if a wave of selling suddenly hit the market and created a double top scenario on SPX. 
  • At this point, it should be assumed that the bulls are in and will remain in control of this market. 
  • Ebola fears has quietly left the market place, but multiple cases of infections could bring back some selling fears. 
  • SPX is no doubt overbought at this juncture of the rally, but those types of conditions can go on far longer than one would ever think. 
  • I would expect as VIX continues to drop that the market will start seeing some bit of normalcy return and not see the kind of gigantic moves that we have seen of late. 
  • Surprisingly VIX only dropped 3.4% to 14.02 on Friday. 
  • Consolidation on the highs of the SPX 30 minute chart looks like there should be another break higher. 
  • Market internal indicators all continue to look fairly healthy at this stage of the game. 
  • This undoubtedly one of the greatest V-Shaped bounces this market has ever seen. Nearly 200 points since 10/15. 
  • The 5-day moving average has been an excellent rising support level for SPX.
  • 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:

  • Sold GPS at $38.20 for a 1.2% gain on Friday.  
  • Added one additional long position to the portfolio on Friday. 
  • Will consider adding 1-2 new long positions today.
  • Remain long RAX at 35.93, INFY at 62.56, MS at 34.40, WYNN 188.24
  • 50% long / 50% cash. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysisc 11-3-14