Pre-market update:

  • Asian markets traded 0.4% higher.
  • European markets are trading 1.1% lower.
  • US futures are trading 0.4% lower ahead of the market open. 


Economic reports due out (all times are eastern): Jobless Claims (8:30), JOLTS (10), EIA Petroleum Status Report (11), Janet Yellen Speaks (12:45), Treasury Budget (2)

Technical Outlook (SPX):

  • Yesterday marked the first down day in six trading sessions. 
  • Despite the selling early on, dip buyers came out in force and managed to maintain the 5-day moving average for yet another day. 
  • Volume was a bit higher than what we have seen of late, but still below average. 
  • VIX rose 0.8% to 13.02. 
  • SPX 30 minute chart continues to show consolidation over the last 3 days. 
  • There is a bearish wedge, a rather big one too, that has formed on SPX. Any decent amount of weakness will confirm this pattern. 
  • Much of the reason for the bearish wedge is the fact that since 1820 SPX has rallied without the slightest of pullbacks and avoiding any kind of higher-low on the chart. 
  • A confirmed bearish wedge will likely just provide that higher-low and nothing more. 
  • This market rally is very similar to the July 2013 rally. Like that rally, we are currently in the later stages where the gains become more “stair-stepped”.
  • Whether the rally continues for the foreseeable future or not, one thing remains, and that is it cannot continue for much longer, to rally at the gravity defying slope it has done for over three weeks now. 
  • As a result, consolidation will have to kick in, in order that the trend-line may flatten out some. 
  • Historically trend-lines that are steeper/greater than 45 degrees are nearly impossible to maintain over an extended period of time. 
  • 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 PHM at $20.70 for a 7.0% gain. 
  • Closed out XLE at $86.46 for a 1.7% loss. 
  • Added two additional long position yesterday. 
  • Will consider adding 1-2 new long positions today.  
  • Remain long MS at 34.40, CAR at $56.57, HUN at 24.73, MAR at 76.11, NFLX at 388.71
  • 70% long / 30% 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 11-13-14