Economic Reports Due out (Times are EST): Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Industrial Production (9:15am), Consumer Sentiment (9:55am)
Pre-market Update (Updated 8:30am eastern):
- US futures are slightly higher ahead of the open.
- European markets are trading 1.2% higher.
- Asian markets traded on average -0.6% lower.
Technical Outlook (SPX):
- Solid day for the bulls yesterday, as price action is finally starting to move out of the 5-day consolidation range.
- To spur on the bulls to additional buying, there needs to be a close above 1334
- Today is options expiration so there is an increased likelihood of volatility in the market (as if we don’t have enough already).
- 50-day moving average could create headwinds for SPX at 1347.
- Continue to follow SPX’s 10-day moving average for short-term support in this market.
- Inverse head and shoulders forming over the past month – currently working on the right shoulder – could see confirmation today.
- IH&S pattern very obvious on the 30-minute chart.
- SPX is no longer overbought.
- Volume remains relatively average.
- The markets in general have pulled back roughly 10% off of its recent highs which is typically considered a “pullback” in the markets.
- A break below 1306 would represent a resumption of the downward trend.
- VIX is still elevated and rests above 21 – below 20 and the bear’s hopes for a break lower is greatly hampered. However, it did take a pretty solid hit yesterday.
My Opinions & Trades:
- I am looking to add more long positions to the portfolio going into today’s open. Conditions are becoming more favorable.
- Careful about trading in and out of this market too much – I’m playing with my original stop-losses which is usually 3-4% off of the entry price and gives me enough wiggle room to weather the choppiness of this market day-to-day.
- Day-traded SDS yesterday and sold at $16.51 from $16.58 for a -0.4% loss.
- Bought PCYC at $40.66 yesterday.
- Currently Long PPL at $27.65.
Charts:
