Pre-market update:

  • Asian markets traded 0.4% higher. 
  • European markets are trading -0.2% lower. 
  • US futures are trading 0.2% higher ahead of the market open. 


Economic reports due out (all times are eastern): GDP (8:30), Jobless Claims (8:30), Corporate Profits (8:30), Pending Home Sales Index (10), EIA Natural Gas Report (10:30)

Technical Outlook (SPX):

  • Yesterday marked a fifth straight day of selling in the SPX and providing follow through after breaking through some key short-term support levels from before. 
  • Look for mid-term support at 1687
  • The rising trend-line off of the November lows is at 1668, which is unlikely to be tested today, but still worth knowing. 
  • 20-day and 50-day moving averages have come together and could offer a respectable amount of support at 1679-80. 
  • Volume continues to remain average. 
  • It becomes more and more difficult to extend a losing streak in an index beyond five days. The probability of a bounce here is very likely. 
  • I am looking to take gains aggressively going forward in my long positions rather than letting them run and simply tightening the stops. I expect this market to remain choppy going forward, but for now we are well overdue for a bounce. 
  • 30-minute chart on the SPY is sporting a nice head and shoulders pattern. 
  • VIX actually sold off for a second straight day, leading me to believe we have a short-term bullish divergence in play here. 
  • A 1-2 week period of consolidation at this point would not be surprising considering the price action that we’ve seen after similar run ups this year on the SPX. 
  • 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:

Chart for SPX:

SP 500 Market Analysis 9-26-13