Pre-market update:

  • Asian markets traded 0.3% lower.
  • European markets are trading flat.
  • US futures are trading 0.3% lower ahead of the market open. 


Economic reports due out (all times are eastern): MBA Purchase Applications (7), Housing Starts (8:30), EIA Petroleum Status Report (10:30), FOMC Minutes (2)

Technical Outlook (SPX):

  • Key day for the market yesterday, as it broke out of a 6-day consolidation period and out of and above key rising support on SPX. 
  • In theory, SPX should be ready to begin the next leg higher on the index and even perhaps make a run towards 2100. However, I have seen plenty of times over the years where that initial breakout on a new rally opportunity quickly gets extinguished and the market sells-off instead. Look at the September highs as an example. 
  • However, you cannot front run this market. It has shown no willingness to breakdown and it therefore should not be shorted until then. 
  • Considering yesterday’s rally, VIX barely moved yesterday after it managed to bounce hard off of the lows of the day finishing only 0.9% lower at 13.86. This does create some concerns heading into today. 
  • SPX continues to hold the 5-day moving average incredibly well, having not closed below it since 10/16.
  • 5-day and 10-day moving average are converging which makes a break of both in one day much more possible and more significant too. 
  • Volume continues to lessen on each of the last 5 trading sessions. 
  • SPX 30-minute chart remains bullish and looking to further move out of the recent consolidation. 
  • Historically trend-lines that are steeper/greater than 45 degrees are nearly impossible to maintain over an extended period of time. 
  • 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:

  • Did not close out any positions yesterday. 
  • Added one additional long position yesterday. 
  • Will consider adding 1-2 new long positions today.  
  • Remain long HUN at 24.73, UA at 68.60, FLEX at 10.98, TSLA at 253.30, INTC at 34.05.
  • 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 11-19-14