Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Pending Home Sales Index (10am)
Premarket Update (Updated 8:30am eastern):
- US futures are moderately lower ahead of the opening bell.
- European markets are trading close to 1% lower.
- Asian markets saw negative returns between -0.3% down to -1.9%.
Technical Outlook (S&P 500):
- S&P made a strong move yesterday, in breakout form, heading straight for resistance at 1340.
- Closing in on a test of the 20-day moving average. Price managed to finish above the 10-day moving average yesterday for the first time since 5/2/12.
- S&P is now short-term overbought.
- 30-minute chart looks choppy, but nonetheless, there is a series of higher-highs and higher-lows.
- Volume has dropped off considerably over the past two days, and to a lesser extent since this market has bounced off recent lows.
- Nearest level of resistance for the S&P is at 1340 and then again at 1357.
- 1294-5 becomes the key support level for the bears to push below. After that we have a support area at 1275.
- VIX is still elevated and rests above 20
- S&P is trading below the 20-day and 50-day moving averages.
My Opinions & Trades:
- We are gapping down this morning, which tends to be problematic for the bears to hold throughout the session.
- Expect continued choppiness in the market.
- I think it will be hard for the market to get past the 1340 mark on the S&P . We are reaching that level, where I think the market is becoming ideal for reloading on the short positions.
- Covered JCI yesterday at $31.07 from $30.29 for a -2.6% loss.
- Added KWK long yesterday at $4.60
- Using the long position to hedge my exposure short, but remain net-short still.
- Remain short CPWR at $9.03, WCRX at $20.15, ATVI at $12.14.
