Pre-market update:
- Asian markets traded flat.
- European markets are trading 0.2% higher.
- US futures are trading 0.1% higher ahead of the market open.
Economic reports due out (all times are eastern): PMI Services Flash (9:45), Dallas Fed Manufacturing Survey (10:30)
Technical Outlook (SPX):
- Afternoon sell-off on Friday eliminated any chance of the market making a new higher-high on the SPX daily chart.
- SPX futures has wiped out the large majority of its overnight losses, and now poised for a ‘green’ open.
- If the market does end up selling off again today, it sets up for what would be the fifth direction change for the market in the month of January.
- On the spectrum of trade-able markets, January will rank as one of the most difficult types you can experience as a trader.
- The volume on Friday’s sell-off indicates that there wasn’t much fear or concern from the market.
- Look for volume to be weak over the next couple of days, as New York braces for record levels of snow fall. The possibility exists that there could be an early close or more if weather conditions dictate over the next two days.
- VIX barely rose just 1.7% to 16.66.
- In three of the last four months we’ve seen the first half of the month trade noticeably lower, followed by a significant rally during the second half of the month to recover all or nearly all of the month’s losses. The exception was the month of November.
- SPX broke above the down trend off of the December highs.
- 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 one new long position to the portfolio yesterday.
- Did not close out any positions yesterday.
- Will consider adding 1-2 new positions today.
- Remain long CTSH at $55.30, BSX at 14.54, ALL at 71.32, PEP at 98.18.
- 50% Long / 50% cash.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
