Pre-market update:

  • Asian markets traded 0.1% higher.
  • European markets are trading 0.1% lower.
  • US futures are trading 0.4% higher ahead of the market open. 


Economic reports due out (all times are eastern): Jobless Claims (8:30), EIA Natural Gas Report (10:30), Consumer Credit (3)

Technical Outlook (SPX):

  • SPX recovered off of the lows, and put in another doji candle for the day.
  • The trend-line off of the November 2012 lows is being tested at the current price level and holding. This is a long-term trend line that should offer the market a respectable amount of support. 
  • The support level as noted in the chart below held up perfectly as well yesterday. 
  • Volume continues to trade at elevated levels. 
  • There were some positive divergences yesterday including that in the T2108 (% of stocks trading below their 40-day moving average) where it managed to pop nicely, while the market traded sideways. 
  • VIX dropped by 3% to 16.37. 
  • SPX 30 minute chart shows some potential for accumulation over the past few days. 
  • Bears remain in control of the market, but concerns of how much further they can really drive price down without a substantial bounce is a significant concern at this point. 
  • Some support off of the trendline formed from the March through May highs. 
  • The sell-off didn’t just begin last Thursday with the hard sell-off, according to indicators like the T2108 (% of stocks trading above their 40-day moving average), stocks have been selling off since the beginning of July, while the overall market was simply consolidating. 
  • As a result, there is a good chance with all the extreme readings that market indicators are providing that we are near a market bottom and ready to bounce higher. 
  • I would not be getting short on this market, as the key/opportune time to have done so would have been in early July. At this point, one is simply chasing after the recent sell-off. 
  • 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:

  • Added one new position yesterday. 
  • Closed out HPQ at 34.67 for a 2.6% loss. 
  • Will consider adding additional positions if the dip buyers come back into the market today. 
  • Remain long EBAY at 51.75, GPK at 12.00, AAPL at 95.56, FB at 72.53, WDC at 102.17.
  • 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 8-7-14