Pre-market update:

  • Asian markets traded 0.2% lower and mixed.
  • European markets are trading 1.0% higher.
  • US futures are trading 0.5% higher


Economic reports due out (all times are eastern): Jobless Claims (8:30), PMI Manufacturing Index Flash (8:58), FHFA House Price Index (9), Leading Indicators (10), EIA Natural Gas Report (10:30), Kansas City Fed Manufacturing (11)

Technical Outlook (SPX):

  • After yesterday’s roller coaster day of trading, there’s no telling what is in store for traders today.
  • The second move which occurred to the upside after the FOMC minutes were released seemed legit, especially since it was twice the move of the original false move. But with an equal third move to the downside, both bulls and bears got trapped in afternoon trading. See last night’s Evening Tape.
  • SURPRISINGLY….This is the longest we have been oversold in 2013.
  • The last three days the SPX has made a move to push through and above the 50-day moving average, only to be rejected each time. A bounce isn’t worth anything unless it can break that moving average.
  • Volume continues to provide little to no clues about this market.
  • VIX closed just a shade below below 16.
  • Yesterday was the first day of true emotion that we have seen in this market during the pullback. .
  • Any significant rally over the next few days will face heavy resistance at the 1684 level of price resistance.
  • Only 22 points removed from long-term rising support off of the November 2012 lows at 1620.
  • The Dow finished lower for a 6th straight day and 11 out of the last 13 days. The need for a bounce is necessary. 
  • 30-minute chart remains entrenched in a downtrend.
  • When short the market in this fed-induced market, you have to to take profits quickly, otherwise you risk being dead-cat bounced out of your positions.
  • I’m still not looking to short this market. Sell-offs in this market environment are quick and hard to capitalize on – better off holding on to the long side and buying on the dips.
  • It is arguable that the SPX is simply trying to form its first higher-low off of the 6/24 lows.
  • Markets don’t care about the economy. 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 URS and BMRN yesterday.
  • Currently 90% long / 10% cash.  
  • Current Longs: FLR at 65.99, WYNN at 139.08, XEC at 79.75, FDX 108.18, BPOP at 32.76, CMI at 123.48, AMZN at 287.30.
  • I’ll look to add 1-2 new positions today but will, in doing so have to subtract from some others I consider non-performers. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 8-22-13