Economic Reports Due out (Times are EST): Consumer Price Index (8:30am), Leading Indicators (10am)

Premarket Update (Updated 6:30am eastern):

  • US Futures are slightly green heading into the open. 
  • Asian markets closed 1.3% higher.
  • European markets are trading 0.5% up to 1.4% higher. 

Technical Outlook (S&P):

  • The bears had every opportunity to drive the market lower, but additional Greek  news and economics reports sent the S&P skyrocketing 20 points off of its lows non-stop (only 1 legitimate red candle yesterday! on the 30 min chart!)
  • We now have a bullish engulfing candle pattern on the S&P from the past two days.
  • The S&P broke out to new recent highs and the next level of meaningful resistance would be at 1370. 
  • S&P managed to regain the 10-day moving average as has been the case the entire year when the index fell below the MA. 
  • Volume was on part with recent readings. 
  • 30-min chart shows the beginning of a breakout on the index. But the key for the breakout will be for there to be continuation today. 
  • Price level support lies at 1326 and then again at 1300. A break of the latter in coming days would drastically change market behavior/outlook. 
  • The SharePlanner Reversal Indicator finally gave us a reversal signal both on the daily and weekly indicators. 

My Opinions:

  • The markets are closed on Monday, and there is a big meeting with Greece, and today is options expiration. So don’t be surprised if we  see some selling ahead of the closing bell do to uncertainty.
  • Rumors continue to drive market hype intraday, don’t be surprised by anything that you see. 
  • The market seems like it needs to go down some before it can legitimately make another significant move higher. A nice shakeout of bulls from their current positions would go a long ways into forming the next leg up in the market. 
  • While recognizing a lot of head winds facing the market from an economic standpoint, the market seems to be pricing everything that we know and expect about the European crisis, and with a solid earnings season as well as easing by the Fed, we could see continued price appreciation this year (particularly with an incumbent President up for re-election).
  • The daily price action, beyond the obvious ‘buy-the-dip” action has been to breakout and move higher, followed by a few days of consolidation and slight pullback. Rinse and repeat.
  • Though we saw the market unable to buy-the-dip yesterday, one day doesn’t mean much – Each time we open where weakness is present, the bulls buy the open, no matter what, and recovers most if not all of the day’s losses. As long as this persists, the bears do not stand a chance, and the bull rally will prevail.