Pre-market update:

• Asian markets traded 0.4% lower.
• European markets are trading 0.1% lower.
  
• US futures are trading 0.2% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): Personal Income and Outlays (8:30), PMI Manufacturing Index (9:45), ISM Manufacturing Index (10), Construction Spending (10)

Technical Outlook (SPX):

• Wild market day on Friday saw SPX in the afternoon wipe away 21 points and trade in the green followed by a sell-off in the last hour and a half to finish down on the day 1.3% (26 points).
• Key support level to be tested today and was held onto by the bulls (barely) on Friday. 
• Break this support level and 1988 and you are looking at another extended move to the downside. Right now, as has been the case with the previous two months, SPX is stuck in a range. 
• Strong volume on Friday, and the most that we saw during the entire month of January. 
• We saw a similar sell-off last January followed by a rebound in February. 
• VIX rose 11.8% to 21 on Friday. 
• T2108 (% of stocks trading above their 40-day moving average) dropped 13.9% to 41.74%. 
• Three key price levels to watch on SPX today: 1989 (Friday’s low), 1988 (January’s lows), 1972 (December’s lows). A violation and close below any of these is problematic for the bulls going forward. 
• A move above 2064 would have been ideal for the bulls to break the market out of the month long congestion pattern we have been stuck in. 
• The 200-day moving average (currently at 1974) could also come in play in the coming week. 
• A move below 1988 would spell bad news for the bulls and create a new lower-low in the market. 
• On the spectrum of trade-able markets, January will rank as one of the most difficult types you can experience as a trader. 
• The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up. 

My Trades:

• Added one new position on Friday. 
• Did no close out any positions yesterday. 
• Will watch for a break to the downside of price levels mentioned above before adding any new short positions today. 
• 20% Long / 80% cash. 
• Remain Long: UPRO at 121.81.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: