Pre-market update:
- Asian markets traded 0.4% lower.
- European markets are trading 0.1% higher.
- US futures are trading 0.4% higher ahead of the bell.
Economic reports due out (all times are eastern): Employment (8:30), Treasury STRIPS (3)
Technical Outlook (SPX):
- An extremely dull market yesterday with little range and little movement in general.
- 20-day moving average provided some tough resistance for the SPX yesterday, as price backed off of it as soon as it was tested yesterday,.
- I’m not going to be comfortable with this market until we can break through the 1670 level of the SPX and I’m skeptical that will happen before we kick off debate on Syria next week.
- Volume fell off some after a nice 3-day ramp.
- The SPX 50-day moving average is in play today at 1665.
- Six out of the last seven trading sessions have ended in hard sell-offs in the afternoon, and most of the time in the final hour.
- Short-term down-trend-line from 8/14 highs remains broken, which may provide some legitimacy to the bounce we are seeing.
- Of greatest concern is the fact that Syria is a huge unknown variable in the market and whether the United States wages war with them will drastically affect the market one way or another. I don’t suspect the market will get volatile until Congress is back in session which will be September 9th.
- Remember – with the Fed involvement keeping the market boosted up in general for years now, unless there is a pipeline of significant negative news that continues to hit the market, it simply won’t go down.
- 1643 represents rising support of the trend-line off of the November 2012 lows – hold it at all costs.
- VIX dropped down into the 15’s .
- I 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:
- Sold VIAB at 79.91 for a 0.8% gain.
- Sold DE at 83.35 for a 1.6% loss.
- Added one new short yesterday.
- Currently 50% long / 10% Short / 40% cash.
- Current Longs: URS at 49.85, YHOO at 27.15, BA at 104.52, SLB at 82.34, PDCE at 58.15.
- My new short position is to act more as a hedge than anything else. I’m not trusting this market at the moment.
- Will look to add 1-2 additional positions to the portfolio today.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
