Pre-market update:

  • Asian markets traded 0.8% higher. 
  • European markets are trading 0.1% lower. 
  • US futures are trading 0.1% lower. 


Economic reports due out (all times are eastern): MBA Purchase Applications (7),Producer Price Index (8:30), Atlanta Fed Business Inflation Expectations (10),EIA Petroleum Status Report (10:30)

Technical Outlook (SPX):

  • After selling off and pushing lower early on yesterday, SPX bounced at the previous day’s lows and finished higher on the day. Only the second time in the last seven trading sessions that the market has finished higher. 
  • Interestingly enough, the test of the underside of the 10-day moving average marked the highs of the day. The MA is starting to show some sings as a support/resistance level again. Right now it is resistance. 
  • The 30-minute chart still shows a head and shoulders pattern in place, however a break above 1700 would nullify this price pattern. 
  • Due to recent consolidation, the Bollinger Bands have contracted quite a bit, and could restrict significant price movement in either direction. 
  • SPX back above the 20-day MA. 
  • SPX continues to sell-off initially at the market open before bouncing immediately thereafter. 
  • The SPX continues to go according to the playbook from 3/6-4/22 nearly perfectly. Especially with the break in support Monday, the SPX did the same thing back on 4/18 before going on a major rally to new highs. 
  • Volume still on the light side. 
  • Consider this market to be consolidating until we can take out and close above the 1709 highs. 
  • 1676 will continue to be the bigger-picture support level. Break and close below it, and you have a new lower-low in this market. 
  • Well off of overbought levels. 
  • VIX dropped hard to 12.31. 
  • There no reason to be short this market right now. None. Not with the Fed’s policy or until that changes. 
  • I remain a buyer in this market. The opportunities to swing short are far too unpredictable, choosing to focus on the long side is the best way to manage risk and maximize profits at this juncture. 
  • Markets don’t care about the economy. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 

My Opinions & Trades:

  • MU broke out for an +8% move to the upside yesterday. Long from 13.86. 
  • Sold HLF at 64.16 for a 2.6% loss. 
  • Added one additional position to the portfolio yesterday. 
  • Added  yesterday.
  • Currently 80% long/20% cash.  
  • Current Longs: CAB at 70.38, PNK at 21.59, CMI at 121.60, MU at 13.86, HUM 91.08, DECK at 58.28, BMRN at 64.70
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 8-14-13