Pre-market update:

  • Asian markets traded 1.3% higher. 
  • European markets are trading 0.1% higher.
  • US futures are trading 0.1% higher ahead of the market open. 


Economic reports due out (all times are eastern): PMI Manufacturing Index (9:45), ISM Manufacturing Index (10), Constructions Spending (10)

Technical Outlook (SPX):

  • SPX rose for the sixth time in the last seven trading sessions. 
  • Reference points for the current rally can be seen on recent and extended rallies that started on the following dates: 12/18, 2/6 and  4/14. 
  • The current rally has only rallied 50 points so far, and it is not out of question, considering how long we were in consolidation for, that SPX might still rally another 50-100 points. 
  • The only moving average that has shown any significant measure of support recently has been the 50-day moving average. That is the only one I would stay focused on at this point. 
  • Volume was strong on Friday, but had only to do with the fact it was the last trading session of the month. I’ve seen above average volume for every last day of the trading month this year. 
  • VIX continues to hover at support that dates back to the April 2013 lows. 
  • SPX 30 minute chart has lost some of its recent momentum. 
  • Eventually there will be a  pullback which will define how steep the uptrend is going to be. But for now the initial burst higher can last 70-80 points without pulling back at all. 
  • A pullback to 1897-1900 is completely fine, but needs to hold that level. 
  • There does remain a significant gap up to fill from 5/27 on the SPY chart. 
  • Nasdaq continues to make a strong push out of its basing pattern. A move towards 4300 should be in short order. 
  • If the SPX, over time advances well into the 1900’s, then it likely becomes that the correction everyone was looking for, took place over time and with consolidation during the March, April and May months and not with a significant pullback. 
  • The number one priority of the bears has to be to get price back below 1900 and ideally back below 1883.
  • The short-term support rising off of the 4/28 lows continues to hold up well. 
  • 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 Opinions & Trades:

  • Closed out LVS at $76.29 for a 4.1% gain. 
  • Did not add any new positions on Friday. 
  • I will look to add 1-2 new long positions today. 
  • Remain long AMAT at 20.04, LAZ at 50.55, AKAM at 54.52, BIDU at 166.96, BBY at 27.37.
  • 50% Long / 50% 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 6-2-14