Pre-market update (updated 9am eastern):

  • European markets are trading -0.7% lower.
  • Asian markets traded -1.3% lower.
  • US futures are moderately lower of the bell. 

Economic reports due out (all times are eastern): Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Housing Market Index (10am)

Technical Outlook (SPX):

  • We saw some weakness on Friday, but what tends to happen every time, the dip buyers rush in at the days lows, and buys up the majority of the day’s weakness and blunts the full effects of what the sell-off could have been. 
  • Volume was stronger on Friday than on any of the days we saw where the market went higher last week. 
  • Gold and Silver are dumping hard on news the Cyprus is having to sell its reserves and countries like Greece, Italy, Spain and Portugal could be right around the corner. 
    • As it stands now, Gold has fallen as low as 1385, and Silver is in the $23’s and down over 10%. 
  • At this juncture, we could see a pullback to 1564 in very short order without any damage to the charts. 
  • 1543 represents the rising, lower channel band. As long as that rising level is not violated the trend thereby remains intact.
  • We are slightly back inside of the upper Bollinger Band, but I do find it disturbing that most of Friday’s candle body fell outside of the upper Bollinger Band. 
  • VIX still managed to finish lower despite the market being in the red. It is on the verge of breaking into the 11’s. 
  • 1600 is a psychological level, that will likely provide some form of resistance in trying to break. 
  • Overbought short-term. 
  • A sell-off today will not concern me today, and should be deemed an opportunity to get in on a stock at a reduced price. 
  • The good thing about reaching new highs for the bulls, is that there is little in the way of price resistance. Though rising support levels can exist. 
  • Any close below 1538, would breakdown the market below the consolidation level and usher in a new wave of bearishness.
  • Markets don’t care about the economy. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 
  • Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

Chart for SPX:

SP 500 Market Analysis 4-15-13