Pre-market update (updated 8:30am eastern):
- European markets are trading -1.4% lower..
- Asian markets traded in excess of -1.0% lower.
- US futures are moderately lower ahead of the open.
Economic reports due out (all times are eastern): None
Technical Outlook (SPX):
- SPX finally manged to break and close above 1374, thereby putting in a higher-high in the market yesterday.
- As it stands now, with this new ‘higher-high’ in place, the market becomes much more favorable for the bulls.
- Volume has increased, ever-so-slightly during the past 3 days.
- On 7/18 we managed to break through the descending trend-line off of the 4/2 highs (see chart below).
- A close below 1325 would create both a lower-high and a lower-low, and thereby turn the market bearish.
- It didn’t take long but SPX is back into short-term overbought.
- Weekly shows SPX coming off of overbought levels, ever so slightly.
- Watch the SPRI – it shows a much more overbought market.
- After last Thursday’s elongated lower shadow, I’ve decided to adjust the upward trend-line off of the 6/4 lows connecting it with that day’s lows.
- As a result, there is a well-defined channel that the market is trading in, and eliminates the bearish channel we had seen before.
- A break below 1333, would break the channel.
- The VIX remains under 16.
- 30-minute chart shows somewhat of an inverse head and shoulders pattern, and support at 1356.
- Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area.
My Opinions & Trades:
- Decided to short FB at $28.94 as a high-beta hedge in this market.
- May use early morning weakness to buy some stocks off of the dip.
- Did not close out any positions yesterday.
- Raising the Stop-loss in AGU to $94.25 from $87.99, and locking about $6.26/share in gains.
- Raising the Stop-loss in PCLN to $644 from $630.
- Still long MDT at $38.47, TPC at $12.43, NFLX at $82.76, AGU at $89.66, PCLN at $644.80, and CIE at $24.22
Charts:
