Pre-market Update (Updated 9:00am eastern):
- US futures are slightly higher ahead of the open.
- European markets are trading mixed/flat.
- Asian markets are traded in a wide range from -0.8% up to +0.5%.
Economic Reports Due out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)
Technical Outlook (SPX):
- Another hard sell-off in SPX is putting in doubt the recent sustainability of the market rally.
- We are close to testing 1306, which is critical support. A break of this price level would officially resume the downward trend off of the 4/2 highs.
- Neckline of the inverse head and shoulders failed to hold support on Monday.
- The market is short-term oversold.
- Weakness in SPX took us back below the 10-day and 20-day moving averages.
- Neckline of the inverse head and shoulders failed to hold support on Monday.
- Weekly chart is showing a shooting-star pattern last week, followed by weakness to begin this week
- Very traditional bearish pattern.
- In order to resume the rally that started off of the 6/4 lows, bulls need to drive price back above 1360.
- There is an established uptrend in place on SPX off of the 6/4 lows with consecutive higher-highs and higher-lows now (two of each).
- Below 1306 ends this uptrend.
- 30-minute chart shows an extreme sell-off that puts it in bounce territory.
- Strong rally in the VIX yesterday puts it back above 20.
My Opinions & Trades:
- I’ll be looking closely at what the market does here, and whether I need to flip my long bias to the short side.
- Will continue trading with a mixture of long and short positions.
- Shorted ABC yesterday at $37.48.
- Bought AUTH yesterday at $4.13.
- I’m willing to add more shorts to the portfolio at this point.
- I am still long AMZN at $221.60 and WNR at $20.51 and short CHD at $52.74
Charts:
