Pre-market update:

  • Asian markets traded 0.6% higher. 
  • European markets are trading flat.
  • US futures are trading 0.1% higher ahead of the market open. 


Economic reports due out (all times are eastern): New Home Sales (10)

Technical Outlook (SPX):

  • SPX had a respectable amount of follow through yesterday, despite giving up half its gains in the final hour of trading. 
  • We are starting to see where SPX is pushing its way out of the congestion that it has been mired in for three months now. 
  • However, we have seen two previous attempts to push into SPX 1900 and both led to sharp reversals. That could still happen here. 
  • That is why it is so important that SPX continues to march higher and finally close above 1900. 
  • The Nasdaq also looks ready to follow suite, though it is nowhere near recent highs. The Russell is the laggard of all the indices. 
  • The 50-day moving average continues to be a significant moving average of support level to watch going forward. 
  • VIX finished higher and back above 12 yesterday. 
  • The short-term support rising off of the 4/28 lows continues to hold up well. 
  • In re: SPY: Don’t be troubled by the heavy volume on down days versus the weak volume on up days – that has been happening for years now. 
  • At all costs, bulls have to make sure that no sell-off results in a close below 1862. 
  • Bears have shown that despite having favorable market conditions time and time again, that they simply cannot push this market lower over a long period of time. 
  • Major milestones like 1900 can often lead to profit-taking as it represents a predefined/psychological level where investors decide to book their gains. 
  • 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 Opinions & Trades:

  • Added one new long position yesterday.
  • Closed out EGN at $84.98 yesterday for a 0.6% gain. 
  • Will look to add 1-2 new long positions today. 
  • Remain long EMC at 25.79, GLW at 20.95, LVS at 73.16, GOOG at 535.16.
  • 50% Long / 50% Cash
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 5-23-14