Pre-market update:
- Asian markets traded 0.7% lower.
- European markets are trading 0.8% higher.
- US futures are trading 0.3% higher ahead of the market open.
Economic reports due out (all times are eastern): Redbook (8:55), Factory Orders (10)
Technical Outlook (SPX):
- SPX experienced an afternoon bounce yesterday in which price rallied 30 points in the final two hours to move from red to green.
- A close above 2024 would represent a move above recent price action.
- SPX closed above the 50-day moving average, the first time it has done so since 1/26.
- Ultimately, price needs to break 2065 to restore bullish confidence.
- Yesterday’s price action represented heavy, heavy short-covering.
- Break this support level and 1988 and you are looking at another extended move to the downside. Right now, as has been the case with the previous two months, SPX is stuck in a range.
- Another solid day of volume yesterday.
- VIX dropped 7.3% to 19.4.
- We saw a similar sell-off last January followed by a rebound in February.
- T2108 (% of stocks trading above their 40-day moving average) rose 17.6% to 49.1.
- Three key price levels to watch on SPX today: 1989 (Friday’s low), 1988 (January’s lows), 1972 (December’s lows). A violation and close below any of these is problematic for the bulls going forward.
- On the spectrum of trade-able markets, January will rank as one of the most difficult types you can experience as a trader.
- 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 on Yesterday.
- Stopped out of GLW yesterday at 23.25.
- Will watch for a break to the downside of price levels mentioned above before adding any new short positions today.
- 20% Long / 80% cash.
- Remain Long: UPRO at 121.81.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
