Pre-market update:

  • Asian markets traded 0.3% higher.
  • European markets are trading flat.
  • US futures are trading 0.1% lower ahead of the market open. 


Economic reports due out (all times are eastern): MBA Purchase Applications (7), Durable Goods Orders (8:30), Jobless Claims (8:30), Personal Income and Outlays (8:30), Chicago PMI (9:45), Consumer Sentiment (9:55), New Home Sales (10), Pending Home Sales (10), EIA Petroleum Status Report (10:30)

Technical Outlook (SPX):

  • SPX pulled back yesterday for only the third time in the last 15 trading sessions. 
  • No technical damage occurred to the charts yesterday, and yet again SPX remains firmly above the 5-day moving average. 
  • Volume should be very light today, and Friday as well. 
  • Stock market is closed tomorrow for Thanksgiving, and open a half day on Friday. 
  • Despite yesterday’s sell-off, VIX continued to sell-off 2.9% down to 12.25. 
  • Despite the unbelievable run and exuberance in the market currently, there is no real signs of cracks under the surface indicating a breakdown is imminent. 
  • SPX 30-minute chart showing signs of possible distribution. A push below 2065 could see an additional move into the 2050’s. 
  • The % of stocks trading above the 40-day moving average continues to increase which means there isn’t any deterioration occurring underneath the surface with stocks. 
  • As a result remaining long on this market is the only logical play at this time. Shorting stocks would undoubtedly be a foolish gesture. 
  • 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. 
  • 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:

  • Closed out BA yesterday at $135.38 for a 4.5% gain.
  • Closed out KBH on Monday at $17.86 for a 3.4% gain. 
  • Did not add any new positions yesterday.
  • Will consider adding 1 new long positions today. 
  • Remain long SBUX at 78.47, SNDK at 100.86, CREE at 36.15, TDC at 45.06. 
  • 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 11-26-14