Pre-market update:

  • Asian markets traded 0.7% lower.
  • European markets are trading 1.1% lower.
  • US futures are trading 0.1% lower ahead of the market open. 


Economic reports due out (all times are eastern): Employment Situation (8:30), Personal Income and Outlays (8:30), PMI Manufacturing Index (9:45), Consumer Sentiment (9:55), ISM Manufacturing Index (10), Construction Spending (10)

Technical Outlook (SPX):

  • Extremely bearish day for the markets yesterday and one of the worst trading days of the year. 
  • Support levels across the board were broken. 
  • Trading range we had been trading in for the entire month was broken and price support at 1955 was violated. 
  • July represented the first negative trading month for the S&P 500 since January. 
  • The 50-day moving average was broken. 
  • The rising trend-line off of the April lows was broken. 
  • The rising trend-line off of the February lows was broken. 
  • Volume was very strong yesterday and panic drove the market’s prices lower. 
  • The T2108 (% of stocks trading above their 40-day moving average) is reaching historical lows that almost always leads to a major bounce. 
  • While on the surface it may seem logical to get short on this market, the fact is, risk has exapanded greatly to the short-side and the risk of being caught in a dead cat bounce is very strong. 
  • VIX rose 27% to 16.95. 
  • 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 two new long positions yesterday. 
  • Closed out GOOG yesterday at 576.50 for a 2.4% loss.  
  • Will consider adding additional positions if the dip buyers come back into the market today. 
  • Remain long EBAY at 51.75, MS at 32.88
  • 40% Long / 60% 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 8-1-14