Pre-market update:

  • Asian markets traded 0.3% lower.
  • European markets are trading 0.5% lower. 
  • US futures are 0.2% lower ahead of the market open. 


Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), Employment Cost Index (8:30), Redbook (8:55)

Technical Outlook (SPX):

  • An afternoon sell-off due to Carl Icahn comments changed an otherwise respectable day in the market. 
  • But lets face it, the sell-off had less to do with Icahn and more to do with the market looking for any reason possible to sell-off….any. 
  • On the SPY, you have a massive bearish engulfing candle pattern that is very troublesome. 
  • Also problematic for the SPX is the fact that we are trading outside the upper Bollinger Band on the weekly chart. Historically when this happens, particularly after two straight weeks of such, the likelihood for a near-term sell-off increases dramatically. 
  • On the other hand, the volume yesterday was notably weak from the market session prior. 
  • Huge uptick in VIX saw the index rise to 13.10 and 7.5%. 
  • SPX 30-minute chart shows a nice pullback underway already but the trend-line still remains in tact. 
  • As warned about yesterday, when critical milestones are reached, it is not uncommon for a hard sell-off to ensue – just like what we saw yesterday. 
  • The 20-day moving average remains as a solid baraometer for guaging the direction and health of the market. 
  • 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:

  • Sold PAY yesterday at $24.69 for a 5.2% gain. 
  • Sold MOS yesterday at $48.59 for a 1.7% gain. 
  • Sold IR at yesterday at $67.59 for a 0.5% loss. 
  • Added two new short positions yesterday to hedge against this market. 
  • I’m careful about the prospects of adding additional long positions in the current market environment. 
  • Wait at least an hour after the market opens before considering a new position today. 
  • Currently 40% long / 20% short / 40% cash.  
  • Current Longs: CHS at 17.30, GPC at 81.40, ETFC at 17.93, LLTC at 41.15. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 11-19-13