Pre-market update:

  • Asian markets traded 0.7% higher
  • European markets are 0.6% higher.
  • US futures are trading 0.2% higher ahead of the market open. 


Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), Construction Spending (10)

Technical Outlook (SPX):

  • SPX added to the broken 5-day moving average from last week, by breaking the 10-day moving average yesterday. 
  • This is problematic for the market as the 10-day MA has been the place where the dip buyers have consistently stabilized the market and bounced higher. Yesterday it offered little support if any. 
  • Today the 20-day moving average is in play at 2045. 
  • The T2108 (% of stocks trading above the 40-day moving average) dropped another 11% to 58.14% – and is clearly showing that stocks collectively are already starting to pullback some.  
  • The VIX rallied 7.2% to 14.29. The spiking in the VIX hasn’t been eye-catching at this point. 
  • SPX 30-minute chart shows a bear flag and action that indicates it is rolling over. 
  • The sum of different indicators and price action makes me very leery of this market. That can all change very quickly with one strong day of rallying. But at this point, I am becoming much more guarded towards adding new long positions. 
  • Volume was heavy yesterday and above average. 
  • This doesn’t necessarily mean a reversal is in order for this market, but it does mean that the market has lost its uber-bullishness that we saw in the latter half of October and early November. 
  • 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:

  • Closed out SNDK yesterday at $102.33 for a 1.5% gain. 
  • Closed out CREE yesterday at $34.98 for a 3.2% loss. 
  • Closed out TDC yesterday at 49.54 for a 1.2% loss. 
  • Added a short  hedge yesterday. 
  • Will consider adding 1-2 new positions today. 
  • Remain long SBUX at 78.47, TGT at 72.11.
  • 20% long / 10% short / 70% 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 12-2-14