Economic Reports Due out (Times are EST): Employment Situation (8:30am), Personal Income and Outlays (8:30am), PMI Manufacturing Index (9am), ISM Manufacturing Index (10am), Construction Spending (10am)
Premarket Update (Updated 8:30am eastern):
- US futures are flat and off their overnight highs prior to the open.
- European markets are trading -2.0% lower. .
- Asian markets traded on average -0.7% lower.
Technical Outlook (SPX):
- We saw the SPX recover from most of its losses yesterday to close a shade below breakeven.
- Huge miss on employment number has us down near 2% at the open today, and a confirmed breakout of the bear-flag pattern that had been developing.
- S&P is poised to test the 200-day moving average today at the open, which we haven’t been below since December of last year.
- Large gap downs, such as what we are seeing this morning, have a difficulty of holding at their intraday-lows and often times will bounce creating a short-squeeze effect.
- We came off of overbought levels yesterday, and are beginning to see a steady increase in trading off of recent low-level volume.
- We are breaking below the lows (1291) from last month as well.
- The SPY chart shows a well defined bearish island reversal over this past week, that does a great job in predicting new downturns.
- 30-minute chart has a newly formed double top in place.
- Nearest level of resistance for the S&P is at 1334 and 1340 and then again at 1357.
- Watch for additional support at 1275.
- VIX is still elevated and rests above 24
- S&P is trading below the 10-day, 20-day and 50-day moving averages.
My Opinions & Trades:
- Careful with adding new positions to the market today on both sides.
- Likely to cover my short positions on such a huge move early on.
- Covered WCRX at $19.02 from $20.15 for a 5.6% gain.
- Covered CPWR at $9.00 from $9.03 for a 0.3% gain.
- Shorted KMI yesterday at $33.38.
- Remain short CNH at $39.85 and KMX at $28.13.
Charts:
