Pre-market update:

  • Asian markets traded 1.7% higher.
  • European markets are trading 0.4% lower.
  • US futures are trading 0.2% lower ahead of the market open. 


Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), International Trade (8:30), Redbook (8:55), Factory Orders (10)

Technical Outlook (SPX):

  • Hardly a sell-off yesterday, yet it was a still a day that stocks took a break in their ripping upward rally. 
  • It would be very easy for the markets to take some additional profits here considering the fact that SPX has rallied over 200 points from the 10/15 bottom. 
  • Ideally some consolidation going forward would be great for the bulls and would provide some prime long setups for the next leg higher. 
  • Continue to watch the 5-day moving average as a dip below it could lead to an extended sell-off. SPX has not closed below it since 10/16.
  • Any notion that we were still in a downtrend was effectively ended on Friday. 
  • The only argument the bears might have at this juncture of the market rally would be if a wave of selling suddenly hit the market and created a double top scenario on SPX. 
  • SPX is no doubt overbought at this juncture of the rally, but those types of conditions can go on far longer than one would ever think. 
  • VIX finished 5% higher yesterday at 14.79.
  • 2013 on SPX 30-minute chart looks like it could be an ideal place for a bounce to come from. 
  • Market internal indicators all continue to look fairly healthy at this stage of the game. 
  • 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 RAX at 38.55 for a 7.3% gain yesterday. 
  • Added two additional long positions to the portfolio on Friday. 
  • Will consider adding 1-2 new long positions today.
  • Remain long INFY at 62.56, MS at 34.40, WYNN 188.24, NFLX at 388.28
  • 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 11-4-14