Pre-market update:

• Asian markets traded 1.4% higher. 
• European markets are trading 0.1% lower.  
  
• US futures are trading 0.1% higher ahead of the opening bell.  
  

Economic reports due out (all times are eastern): PMI Manufacturing Index (8:58), ISM Manufacturing Index (10), Construction Spending (10)

Technical Outlook (SPX):

• Huge gap higher to start the new week and month off. There’s no doubt the bears will try to short the gap, but whether the bulls can hold it together is the bigger question. 
• Heavy volume to close the month out and the highest since the trading session that closed out July. 
• 10-day moving average has offered heavy resistance for the markets – twice out of the last four days of trading has failed to break through the resistance. Today the Moving average is 1645, which is where the SPX should open up at. 
• First day of the trading month can seen and increased amount of buying interest as has been the case the last three months. 
• At the very least,  a close above 1640 is imperative for SPX which represents the rising trend-line off of the November lows. 
• SPX remains in oversold territory and its longest tenure of such since November 2012. 
• Spike in VIX takes us through and into the 17’s. 
• Third straight day of sudden meltdowns in the final hour of trading – a great sign that the bears have not become afraid of this market yet. 
• If the rising trend-line breaks the next critical level of support is the 1560 level of the SPX which was the last previous major higher-low. 
• I still maintain that the best strategy for this market is to continue trading to the long side in this market. Sell-offs in this environment are quick and hard to capitalize on – better off holding on to the long side and buying on the dips.
• 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 BA on Friday. 
• Sold FDX at 107.24 for a -0.9% loss. 
• Currently 80% long / 20% cash.  
• Current Longs: URS at 49.85, BMRN at 64.50, WYNN at 139.08, CMI at 123.48, DE at 84.75, VIAB at 79.25, and YHOO at 27.15. 
  
• Will look to add new long positions once the market get’s out of the first hour of trading unscathed. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: