Pre-market Update (Updated 8:30am eastern):
- US futures are slightly higher ahead of the open.
- European markets are trading -0.6% lower.
- Asian markets are trading -0.9% lower.
Economic Reports Due out (Times are EST): None
Technical Outlook (SPX):
- SPX saw one of its biggest sell-offs of the year yesterday.
- Broke through the 10-day moving average, that had previously acted as reliable support for the market.
- Interestingly, the 100-day moving average has been a tough resistance barrier over the past 3 days.
- 50-day moving average was also broken without any fight.
- It’s safe to say we are no longer overbought this morning.
- Wednesday and Thursday’s volume levels are significantly higher on the SPY than what we saw on Monday and Tuesday when the market was up.
- We broke the upward trend-line in SPX yesterday.
- However, that doesn’t mean the uptrend is over, but the steepness and acceleration does flatten out, and puts into question where the market bottoms out at.
- A drop below 1306 is what I’m watching for a shift in market sentiment.
- The move off of the June 4th lows is very similar to the bullishness that we saw in October of last year and September 2010.
- There is now an established uptrend in place on SPX off of the 6/4 lows with consecutive higher-highs and higher-lows now (two of each).
- SPX has a confirmed the inverse head and shoulders price pattern in place.
- 30-minute chart shows price action pulling back to support and the previous area where significant consolidation occurred.
- VIX back above the pivotal 20 level.
My Opinions & Trades:
- Yesterday’s continual sell-off puts inserts fear right back into this market.
- I’m taking a wait-and-see approach.
- Sold PCYC at $47.17 from $40.66 for a 16% gain
- Sold LF at $10.28 from 10.60 for a -3% loss
- Sold AH at $11.94 from $12.50 for a -4.5% loss.
- Sold CHD at $52.81 from $53.95 for a -2% loss.
- Shorted CHD at $52.74.
- I am still long AMZN at $221.60 and WNR at $20.51
Charts:
