Pre-market update:

  • Asian markets traded 1.0% higher.
  • European markets are trading 1.2% lower.
  • US futures are trading 1.3% lower ahead of the market open. 


Economic reports due out (all times are eastern): Durable Goods Orders (8:30), Redbook (8:55), S&P Case Shiller HPI (9), PMI Services Flash (9:45), New Home Sales (10), Consumer Confidence (10), Richmond Fed Manufacturing Index (10), State Street Investor Confidence Index (10)

Technical Outlook (SPX):

  • SPX looking at a significant gap down of about 1.2% at the open due to bad earnings reports and a miss on the durable goods report. 
  • SPX actually had managed to put in a respectable day yesterday and form what was starting to look like a bull flag, but that will be null and void by the market open. 
  • Often times when you see this level of bearishness at the market open, it can often lead to a bounce back once the market opens – don’t rule this out from happening today. 
  • The gains from Thursday are likely to be completely wiped out by the market open. 
  • Based on overnight futures actions, SPX is setting up for a bounce at the open. Eight straight red bars on the overnight futures chart. 
  • FOMC meeting tomorrow as well, and depending on what they say, can easily reverse any market perception going forward. 
  • If the market does end up staying down 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. 
  • VIX fell 6.8% down to 15.5.
  • 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 watch the market early on this morning before adding any new positions. May be the only feasible action is to sit on one’s hands today. 
  • Remain long CTSH at $55.30, BSX at 14.54, ALL at 71.32, PEP at 98.18, IRM at 40.64.
  • 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 1-27-15