Pre-market update:

  • Asian markets traded 0.2% higher.
  • European markets are trading mixed and flat. .
  • US futures are trading flat ahead of the opening bell.


Economic reports due out (all times are eastern): Durable Goods Orders (8:30), Dallas Fed Manufacturing Survey (10:30)

Technical Outlook (SPX):

  • SPX received some follow-through off of Thursday’s rally with a gradual increase on Friday.
  • Most importantly, it reclaimed the 50-day moving average, which had haunted the SPX the previous four trading sessions.
  • Below 1639 on the SPX equals a resumption of the downtrend.
  • 1687 represents the next major level of resistance for the SPX to break through which previously was the consolidation support level for the market from 7/16 – 8/14.
  • SPX can be considered to be in a dead-cat bounce mode as long as it remains below 1700.
  • Market is coming off of oversold conditions, which in 2013 has led to significant rallies to the upside.
  • Volume was extremely light Thursday and Friday, and that is expected to continue through this week ahead of the 3-day weekend.
  • VIX back underneath 14.
  • Nice rounded bottom on the 30-minute chart of the SPX.
  • Key support exists off of the rising support level from November 2012 lows and currently at 1630.
  • I still maintain that the best strategy for this market is to continue trading to the long side in this market. Sell-offs in this 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.
  • Markets don’t care about the economy nor earnings. 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:

  • Added one additional position: PAAS at 13.40.
  • Currently 100% long / 0% cash.  
  • Current Longs: URS at 49.85, BMRN at 64.50, FLR at 65.99, WYNN at 139.08, XEC at 79.75, FDX 108.18, BPOP at 32.76, CMI at 123.48, AMZN at 287.30.
  • I’ll look to add 1-2 new positions today but will, in doing so have to subtract from some others I consider non-performers. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 8-26-13