• S and P 500 Market Analysis 3-08-13

Pre-market update (updated 9am eastern):

  • European markets are brading 0.9% higher.
  • Asian markets traded 1.4% higher. 
  • US futures are trading moderately higher ahead of the opening bell. 

Economic reports due out (all times are eastern): Employment Situation (8:30am), Wholesale Trade (10am)

Technical Outlook (SPX):

  • SPX managed to finish higher for the 7th time in the last 8 trading sessions and 60 points during that same time period. 
  • Always be careful with the strong gap up especially when the market is overbought like it is. After the first hour of trading it can often times lead to a sell-off, after initially putting in new highs.
  • The Dow has traded out side of the upper Bollinger Band for the third straight day – a very impressive feat and one that won’t last for long. 
    • Ironically the last time this happened was March of last year and we pulled back 300 points on the Dow. 
  • Significant bearish divergence on the T2108 as the market is putting in recovery highs, the T2108 (% of stocks trading above their 40-day MA) is significantly lower. 
  • With the rise in equities heading into the employment number, don’t be surprised if at some point it becomes an opportunity for profit taking today. 
  • The SPX is trading outside the upper bollinger band, and recent occurrences has led to a notable pullback in the market of 40-60 points. 
  • We continue to see declining volume levels as the market increases its gains, leading me to believe there is a lack of enthusiasm in this current market rally. 
  • The weekly chart shows a strong breakout in place. 
  • VIX is back in the 13’s and could see the 12’s again today. 
  • SPX back to its old ways of being overbought. 
  • Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 3-08-13

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