Pre-market update:

  • Asian markets traded 1.8% lower. 
  • European markets are trading 1.2% lower..
  • US futures are trading 0.5% higher


Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), Chicago Fed National Activity Index (8:30), Redbook (8:55).

Technical Outlook (SPX):

  • Bottom line (but at the top of this post): We are prime for a bounce today.
  • SPX has spent the last 3 days outside the lower Bollinger Band – last time that happened, 6/24, we marked a low in the market and we rallied hard thereafter.
  • Not much support to speak of nearby except for rising support that is at 1619 today (Trend that started from the November 2012 lows).
  • Getting back and above the 50-day moving average could pose a problem for the SPX today.
  • 30-minute SPX chart has seen 4 straight days of selling with little in the way of any kind of intraday bounce.
  • We are firmly entrenched in oversold territory.
  • Volume slacked off yesterday.
  • When short the market in this fed-induced market, you have to to take profits quickly, otherwise you risk being dead-cat bounced out of your positions.
  • Dead cat bounce sees no resistance until 1684.
  • I’m still not looking to short this market. Sell-offs in this market environment are quick and hard to capitalize on – better off holding on to the long side and buying on the dips.
  • It is arguable that the SPX is simply trying to form its first higher-low off of the 6/24 lows.
  • For the market to continue its drop, there needs to be a steady stream of bad news –  a pipe line per se, to keep driving this market lower.
  • 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:

Chart for SPX:

SP 500 Market Analysis 8-20-13