Pre-market update:

  • Asian markets traded flat. 
  • European markets are trading 0.8% lower.
  • US futures are trading 0.4% lower ahead of the market open. 


Economic reports due out (all times are eastern): Housing Starts (8:30), Jobless Claims (8:30), Philadelphia Fed Survey (10), EIA Natural Gas Report (10:30)

Technical Outlook (SPX):

  • Solid day of trading yesterday in which the SPX completed a bullish kicker candle pattern over the past two days. 
  • This is formed when following a down candle, price gaps up above the opening price of the previous day and pushes higher. Very bullish pattern. 
  • Some weakness in the futures market, but as has been the case with all gaps lately, the market has nearly filled every one of them. 
  • Gap downs tend to be a dip-buyer’s best friend. Look for SPX to establish lows within the first 30 minutes to an hour of trading, before moving steadily higher. 
  • After establishing the morning lows within the first hour, if SPX then breaks the lows of the day, that is a good sign that the market will trend lower on the day. 
  • VIX dropped another 8% to 11. 
  • Volume was much stronger for a day in the positive than what I’ve become accustomed to seeing. 
  • SPX 30 minute chart dating back to 7/7 is extremely choppy and in a well defined sideways range. 
  • As before, the 20-day moving average keeps coming up strong for the bulls offering support and an area where the bulls can bounce hard off of. 
  • Since 7/1, SPX has essentially be consolidating at the highs. Not at all surprising, and probably necessary. 
  • The number one goal of the bears at this point should be to get price below the lows of last Thursday at 1952. Next stop would be creating a short-term lower-low at 1944. 
  • SPX heading towards short-term overbought again. 
  • This market still leans bullish, but needs to break out to new all-time highs at some point this week if it wants to keep the momentum on its side. 
  • The dip buying has also been in conjunction with holding the upward trend-line off of the 6/12 lows. 
  • SPX hasn’t seen a move of more than 1% in either direction since April. 
  • 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 WDC at $101.23 for a 6.7% gain. 
  • Added one new long position to the portfolio yesterday. 
  • Will look to add 1-2 new positions today. 
  • Remain long AXL at $19.73, KATE at $38.10, VALE at 14.01, LVLT at $45.49, GPK at $11.82.
  • 60% Long / 40% 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 7-17-14