Pre-market update (updated 9am eastern):
- Europe is trading mixed.
- Asian markets traded in a broad range from -0.7% up to +0.7%
- US futures are slightly higher ahead of the opening bell.
Economic reports due out (all times are eastern): None
Technical Outlook (SPX):
- Triple top now forming on the SPX, as Friday saw a very hard sell-off.
- Held the 50-day moving average, which last few times we have tested this price level, has resulted in a market bounce.
- Friday’s sell-off practically wiped out all of the week’s gains.
- Despite the sell-off, we still remain in a sideways channel, that has yet to provide us with a signal to the up or down side.
- Volume was notably higher on Friday, during the sell-off, though this could be attributed to options expiration as well.
- A break below 1425 would be significant, as long as we close below that level.
- To the upside, the bulls needs to break 1464
- Slight increases in the volume level over the last four days consecutively.
- 30 minute chart looks extremely choppy, but mirror image of daily price action.
- Multiple ways to look at this market… I’ll detail both perspectives
- Considering the larger uptrend that we were in from the 6/4 lows, one could consider this to be a developing bull-flag before moving higher.
- I’d recommend not drawing a conclusion on either scenario – let the market do that eventually.
- VIX spiked the most it has in a very long time – over 13% to above 17.
- Fed’s QE3 launch is going to add a lot of buying power to this market and drive more people out of interest-bearing assets and into equities in search of some kind of return.
- One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
My Opinions & Trades:
- Shorted CAKE at $33.97.
- Track my portfolio RealTime here.
Charts:
