• SP 500 Market Analysis 10-1-13

Pre-market update:

  • Asian markets traded -0.5% lower. 
  • European markets are trading 0.2% higher. 
  • US futures are trading 0.3% higher ahead of the market open. 


Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45), Redbook (8:55), PMI Manufacturing Index (8:58), ISM Manufacturing Index (10), Construction spending (10)

Technical Outlook (SPX):

  • Yesterday’s sell-off resulted in a small rally off of the lows of the day erasing about a 1/3 of potential losses on the day. 
  • SPX managed to bounce and hold the 50-day moving average yesterday. 
  • Came within 4 points of testing the long-term trend-line off of the November 2012 lows. Not a true test, 
  • Volume was slightly higher  yesterday than what we are used to seeing. 
  • SPX has declined for 7 out of the last 8 trading sessions. A market bounce is well overdue at this juncture. 
  • The SPX should provide us witha  short-term oversold reading today. 
  • First trading session of the month has historically been bullish for the markets. That has also been the case for three straight months since June. 
  • The Trend-line off of the November 2012 lows is in play today at 1673. 
  • Long-term I don’t believe a government shutdown hurts the market.
  • If a compromise is reached, expect a significant bounce back. 
  • Confirmed Head and shoulders pattern on the SPX 30-minute chart in play. 
  • Markets don’t care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 

My Opinions & Trades:

Chart for SPX:

SP 500 Market Analysis 10-1-13

 

You Might Like

  • Short-term bounce

    The Anatomy of a Short-Term Bounce

  • January Barometer: As January goes, so goes the year.

    January Barometer: As January Goes

  • Swing Trading the Holidays