• S and P 500 Market Analysis 1-17-13

Pre-market update (updated 7:30am eastern):

  • European markets are trading 0.2% higher.
  • Asian markets traded 0.2% higher. 
  • US futures are trading slightly higher ahead of the opening bell.. 

Economic reports due out (all times are eastern): Housing STarts (8:30am), Jobless Claims (8:30am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

  • We had our fourth day in a row of morning dips followed by afternoon buying. Four straight days with long lower shadows on the candle. 
    • It shows that there is a heavy bid underneath this market keeping it from drifting lower. 
  • Despite not moving much, price did manage to push slightly higher and above recent consolidation – albeit by a half point. 
  • Due to the recent consolidation we have plenty of overhead room for this market to run before hitting the upper channel line. 
  • Volume was notably light yesterday. 
  • VIX continues to push lower and is now in the 13.40’s. 
  • Based on the action of the last four days, it appears to me that we are setting up for a strong move higher, in which I will likely use it to book gains in some current positions. 
  • For 10 straight days – the 10-day moving average has offered positive support for the bulls as it trades just above it. 
  • A short-term push below 1451 would give good reason to tighten stops or take gains on existing positions and let the the pullback work its magic. 
  • 30-minute chart looks like it is on the verge of a breakout of consolidation. 
  • Of late, there have been quite a few market rallies/sell-offs in the last hour of trading, much like what we saw yesterday and Friday.
  • Notice the channel that we are currently trading in, off of the November lows (see chart below).
  • There’s really no significant level of resistance for the market above 1466 until you get to 1501. 
  • It will take a significant move, but below 1398, the trend will be very bearish. 
  • Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 
  • There is still a huge gap on the SPY chart that ultimately needs to be filled. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 1-17-13

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