• I am using this shortened holiday week of trading to take some extra time to be with my family. I’m still staying updated and monitoring the markets as well as my open positions, but my positing frequency is much less this week. So hang in there until I get back next week. I’m actually doing this post here on Monday night in a McDonalds in Po-dunkville. Quite a contrast to my office back home 🙂 Happy Fourth of July week to everyone!

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), Redbook (8:55), Factory Orders (10)

Technical Outlook (SPX):

  • The major takeaway from Monday’s market action, is that the bears continue to double down on this market in hopes that eventually they will be proven right and the market will push lower as a result. That’s the reason we continue to see these end of day sell-offs happening in the final hour of trading. 
  • This only adds to the buying power the bulls have, as it will only cause the bears to cover their ill-conceived short positions and thus push the market even higher. 
  • SPX managed to reclaim the 1608 level that I do believe is the pivotal level for the index to hold. 
  • The descending trend-line off of the SPX 5/22/13 highs needs to be broken. Tuesday’s session will be at 1637. 
  • SPX also failed to hold the 20-day moving average. I don’t consider this to be a major problem, but would like to see it hold nonetheless. The same can be said about the 50-day moving average as well.
  • Ultimately, to put in a higher-high in this market, the SPX needs to break above 1654.  
  • Volume continues to come in at a respectable level. 
  • SPX 30-minute chart continues to turn in a series of higher highs and higher lows. Which is very healthy. 
  • VIX dropped down to 16.35. 
  • June marked the first negative trading month since October 2012. It marked the end of seven straight green months. 
  • The one thing you are not seeing that typically accompanies a major market sell-off is continuous bad news coming out. We had the FOMC Statement and that has been it. 
  • I simply do not think the bears can keep driving this market lower without some form of a catalyst, besides the tapering comments made before by the FOMC. 
  • 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:

  • Sold PCYC at 87.25 yesterday for a 8.3% GAIN.
  • Current Longs: WLP at 80, CME at 76.35, GS at 153.16, LPI at 20.28, GS at 153.16, GOOG 872.67, V at 182.15, BCR at 108.70. 
  • I will only add new positions today if the market provides an ideal opportunity to do so. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 7-02-12