Pre-market update (updated 9:00am eastern):
- European markets are trading 0.6% higher.
- Asian markets traded 0.7% higher.
- US futures are slightly higher ahead of the bell.
Economic reports due out (all times are eastern): NFIB Small Business Optimism Index (7:30am), ICSC-Goldman Store Sales (7:45am), Producer Price Index (8:30am), Retail Sales (8:30am), Redbook (8:55am), Business Inventories (10am)
Technical Outlook (SPX):
- S&P finished lower for the first time in seven sessions.
- Volume has become nearly obsolete and in line with holiday like volume. In fact volume has decreased 8 out of the last 9 sessions.
- Such low volume levels leads me to believe that we may be weakening under the surface and that the slightest bit of bad news accompanied with volume will trigger a stop-order raid on the bulls.
- The choppiness that has been a part of the trading action is due in large part to the low volume levels as well.
- We remain well-overbought on all time frames.
- Watch the 10-day moving average for minor support at 1392.
- Next level for bulls to overtake is the 1422 recovery highs on the SPX.
- It’s not uncommon to see large market rallies going into an incumbent re-election.
- If you look at the 4 previous higher-highs in the market since the 6/4 bottom, then one could conclude that we’ve reached another temporary top, and are prime for another pullback.
- One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
- At this point, uptrend support rests at 1356.
- SPX trading above all significant moving averages (10,20,50,200).
- VIX has moved below 15 for the first time since March.
- If another sell-off were to ensue, watch for a break and close below 1354 for a new lower-low in the market.
My Opinions & Trades:
- Closed out position in EL ahead of earnings at $54.95 from 55.07 for a -0.2% loss.
- Shorted COG at $42.01 yesterday. Still holding.
- Closed out RHT at $55.85 from $56.19 for a -0.6% loss.
- Moved my stop-loss in MDT up to $39.61.
- Bought OSK at $23.74.
- Going to consider any sell-off as opportunities to buy stocks on the cheap. Dip buying should be the norm until a lower-low is put in place.
- Remain long OSK at $23.74, AIG at $32.46, MDT at 38.15 and AMZN at $233.90. Short BRO at $25.65, HE at $28.45
Charts:
