Pre-market update:

• Asian markets traded 0.8% lower.
• European markets are trading flat/mixed.. 
• US futures are trading 0.3% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): Challenger Job-Cut Report (7:30), Jobless Claims (8:30), EIA Natural Gas Report (10:30)

Technical Outlook (SPX):

• Extremely choppy session yesterday, with SPX finishing barely below breakeven for the day. 
• It could be that we are seeing ‘zero’ market direction at the moment due to the torch being passed from Bernanke to Yellen for the Fed Chair. Once that transition is complete, traders may become more comfortable with the market. 
• A break below 1823 could become a huge problem for the SPX short-term as it would create a new lower-low for the index. This is where the bears should have their sights set on. 
• Volume was above average for the first time in a very long time. 
• 30-minute chart has a bit of an inverse head and shoulders pattern that has formed since the beginning of the new year. 
• VIX dropped ever so slightly yesterday. 
• Once 1849 clears, SPX should see a very strong push higher thereafter. 
• SPX also held the 10-day moving average which is a great indicator of direction but of late not a great area of support for price. 
• The 10-day moving average going forward shouldn’t be relied on much as numerous failures has plagued it without any support since December. Let it re-establish itself as a support overlay before considering it again. 
• Slightly outside of overbought levels on SPX. 
• 1809 from longer-term perspective becomes the critical price level in the short-term that the SPX must not drop below. 
• January is starting off in much the same way as December 2013 did – so keep that in mind. 
• Trend-line support off of the October lows lies at 1803 – and currently out of reach for the bears. 
• There is absolutely no reason at all to be net-short this market. 
• 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:

• Added two new position yesterday. 
• Did not close out any of my existing trades. 
• Remain long EWBC at 34.52, JDSU at 13.00, GT at 23.81, SBGI at 36.60, CAT at 89.14
• I expect to add 1-2 new positions today. 
• Long 70% / Cash 30% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: