Pre-market update:

  • Asian markets traded 0.4% lower.
  • European markets are trading 1.5% lower. 
  • US futures are trading 1% lower ahead of the bell. 


Economic reports due out (all times are eastern): ICSC Goldman Store Sales (7:45), Redbook (8:55), S&P Case Shiller HPI (9), Consumer Confidence (10), Richmond Fed Manufacturing Index (10), State Street Investor Confidence Index (10)

Technical Outlook (SPX):

  • After a relatively flat day, the final hour brought on a quick sell-off on John Kerry’s Syria speech and the bearishness has troubled the market into today’s open. 
  • SPX looking to test the lows from 8/21 at the market open. 
  • Major support for this market rests at 1631. If you break it, the channel off of the November 2012 is broken as well. 
  • Gap downs to the extent that we are seeing it ahead of the bell, have a difficult time in sustaining itself. Often times, after the first hour’s lows are put in, the dip buyers will start to flow in and push the market off of the day’s lows. 
  • Seeing the dip buyers come in after the first hour of trading will be key for the bulls today. 
  • Bearish engulfing pattern formed over the past two trading sessions. the potential is there for a short-term lowre-high having been formed yesterday. 
  • Fell back below the 50-day moving average yesterday. 
  • 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.
  • 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.
  • 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: . 
  • Sold AMZN at 286.30 for a 0.3% loss. Sold BPOP at 33.01 for a 1.84% loss. 
  • Currently 90% long / 10% cash.  
  • Current Longs: PAAS at 13.40, URS at 49.85, BMRN at 64.50, FLR at 65.99, WYNN at 139.08, XEC at 79.75, FDX 108.18, CMI at 123.48.
  • Will wait on this market today to see whether the bulls come in and provide support at key price levels. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 8-27-13