Pre-market update:

  • Asian markets traded 0.4% higher..
  • European markets are trading 0.7% higher.
  • US futures are trading 0.1% lower ahead of the market open. 


Economic reports due out (all times are eastern): Jobless Claims (8:30), PMI Manufacturing Index Flash (9:45), Philadelphia Fed Survey (10), Existing Home Sales (10), Leading Indicators (10), EIA Natural Gas Report (10:30)

Technical Outlook (SPX):

  • SPX right on the cusp of establishing new highs. By far the best case scenario that could have happened for the bulls following the late July sell-off. 
  • Volume on this rally has been no where near the volume on the sell-off, but that phenomenon has been the case for nearly every sell-off and rally for the past five years and the market continues to march higher. 
  • Having rallied over the last nine days (seven of which were bullish days) nearly 82 points, I am still long, but I am curbing my enthusiasm some with how many positions I am willing to hold overnight. 
  • At this point I wouldn’t be surprised to see some profit taking in the market, but yet, the market can always rally much, much more than you could ever expect. 
  • It is worth enduring some profit taking at the expense of not missing much more upside to this market. 
  • 5-day moving average for the SPX is a good indicator for determining the direction of this market in the short-term. 
  • 30-minute chart suggests as well that a 10-15 point pullback would keep the charts healthy. 
  • VIX dropped another 3.5% down to 11.78.
  • At this point, the story becomes whether the bulls will break all-time highs and 2000. 
  • The notion of this being a dead cat bounce has become nullified. 
  • SPX is well into overbought territory. 
  • 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:

  • Sold STLD yesterday at $23.16 for a 5.5% gain.
  • One new long position was added to the portfolio yesterday. 
  • Remain long AAPL at 95.56, FB at 72.53, ESRX at 71.01, NFLX at $454.91, CMI at 142.79.
  • Will look to add 1 new long position today and also look to close out positions that are extended to the long side. 
  • 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 8-21-14