Pre-market update:

  • Asian markets traded 0.2% higher.
  • European markets are trading 0.1% lower.
  • US futures are trading 0.2% lower ahead of the market open. 


Economic reports due out (all times are eastern): MBA Purchase Applications (7), Housing Starts (8:30), Redbook (8:55)

Technical Outlook (SPX):

  • SPX saw dip buyers emerge in the early afternoon yesterday to wipe out the day’s losses and finish in the green for the day. 
  • Perfect channel that has formed over the last two months that is worth watching going forward as Friday’s bounce occurred right when it was tested. 
  • However, since making new all time highs in late December, SPX is still putting in lower-highs and lower-lows. But the depth of these moves have been limited. 
  • On the daily chart, dating back to November, you have a dilapidated head and shoulders pattern that has emerged on SPX. Needs to break Friday’s lows for it to confirm though. 
  • VIX dropped another 5.1% down to 19.89. 
  • Massive inverse head and shoulders pattern on SPX 30 minute chart that has confirmed. Very bullish. 
  • Volume was average yesterday – a drop off from recent days. 
  • T2108 (% of stocks trading above the 40-day moving average) actually ran counter to the market rally by dropping 4.6% down to 40.89. 
  • 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:

Chart for SPX:

SP 500 Market Analysis 1-21-15