Pre-market update:

  • Asian markets traded 0.7% lower.. 
  • European markets are trading 0.3% lower.
  • US futures are trading 0.2% higher ahead of the market open. 


Economic reports due out (all times are eastern): Consumer Sentiment (9:55), Leading Indicators (10)

Technical Outlook (SPX):

  • Heavy sell-off yesterday and the first time in over three months that the SPX has made a move of more than 1% in either direction. 
  • As a result volatility spiked through the roof 32%
  • Potential for a short-term double top has emerged on SPX. A push below 1952 today would confirm this. 
  • Volume was very heavy yesterday as would be expected on a day like we had. 
  • Lots of potential headline risk creeping into the market with the Malaysian airliner being shot down in Ukraine airspace and Israel’s ground offensive in gaza. 
  • If these events are more like one-time events, and don’t spiral into additional news stories, than the likelihood that the bulls will buy the dip is very real. 
  • The trend-line off of the April lows was tested yesterday and held (see below).
  • If 1944 breaks SPX will have put in a lower-low and that is bearish. 
  • 10 and 20-day moving averages both broken yesterday. 
  • 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 Trades:

  • Sold VALE at 14.14 for a 0.9% gain. 
  • Sold GT at 27.58 for a 1.5% loss. 
  • Sold GPK at 11.58 for a 2% loss. 
  • Added one new short position to the portfolio yesterday. 
  • Will look to add 1-2 new long positions today. 
  • Remain long AXL at $19.73, KATE at $38.10, LVLT at $45.49
  • 40% Long / 10% short / 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 7-18-14