Pre-market update:

  • Asian markets traded in a wide range between -0.6 and +0.4%.
  • European markets are trading 0.4% lower.
  • US futures are trading 0.1% higher ahead of the market open. 


Economic reports due out (all times are eastern): MBA Purchase Applications (7), ADP Employment Report (8:15), International Trade (8:30), Productivity and Costs (8:30), ISM Non-Manufacturing Index (10), EIA Petroleum Status Report (10:30), Beige Book (2)

Technical Outlook (SPX):

  • Another day where the dip buyers kept the market from losing too much of its recent gains. 
  • Another similar hanging man candle that was formed yesterday. 
  • The last three days could represent a bit of a consolidation phase taking hold of the market right now. 
  • As it currently stands, the bears are not showing any true ability to drive this market lower. Instead each intraday dip is getting quickly bought up. 
  • Volume was rather light yesterday. 
  • VIX popped 2.5% back up to 11.87.
  • SPX 30-minute chart shows consolidation taking hold. 
  • SPX pulled off of the upper Bollinger Band which is healthy and necessary in this market. 
  • Hanging man candle formed on SPX – often times this can signal a market reversal, though its accuracy is sketchy at best. 
  • Reference points for the current rally can be seen on recent and extended rallies that started on the following dates: 12/18, 2/6 and  4/14. 
  • The only moving average that has shown any significant measure of support recently has been the 50-day moving average. That is the only one I would stay focused on at this point. 
  • A pullback to 1897-1900 is completely fine, but must hold that level. 
  • There does remain a significant gap up to fill from 5/27 on the SPY chart. 
  • If the SPX, over time advances well into the 1900’s, then it likely becomes that the correction everyone was looking for, took place over time and with consolidation during the March, April and May months and not with a significant pullback. 
  • The short-term support rising off of the 4/28 lows continues to hold up well. 
  • 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 Opinions & Trades:

  • Closed out LAZ at 51.47 for a 1.8% gain. 
  • Closed out BIDU at 162.92 for a 2.4% gain. 
  • Added two new long positions yesterday. 
  • I will look to add 1-2 new long positions today. 
  • Remain long AMAT at 20.04, AKAM at 54.52, BBY at 27.37, HOT at 80.26, HAL at 63.07.
  • 70% Long / 30% 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 6-4-14