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Pre-market update (updated 8:30am eastern):

  • Europe is trading 1.2% higher. . 
  • Asian markets traded mixed but with a slight bearish tilt. . 
  • US futures are trading slightly ahead of the bell.

Economic reports due out (all times are eastern): PMI Manufacturing Index (9am), ISM Manufacturing Index (10am), Construction Spending (10am), Bernanke Speaks (12:30pm)

Technical Outlook (SPX):

  • Friday's action didn't give up all of the bounce's gains but did give up a good portion of it, leading me to believe that we may see further downside in the days ahead. 
  • Potential exists that we may be forming a bear flag on the SPX daily. 
  • First trading day of a new month/quarter tend to be very bullish, and in this case, you'll likely have a lot of fund managers chasing performance as we head into the final stretch of the year. 
  • Ideally, if the morning strength holds, it would do the bulls well, from a sentiment standpoint, to finish above 1462. 
  • For the bears, they need to fill the morning gap and drive price below 1430, which was Wednesday's lows, to shift sentiment. 
  • 30-minute chart shows a lot of resistance in the 1458 area of SPX. 
  • Despite all the selling we've been seeing of late, VIX is still in the 15's. 
  • Best way to use moving averages should be as sentiment indicators and not a "line-in-the-sand" type of approach. 
  • Beyond that there is some (very slight support) at 1428. More significant support lies at 1396 and 1412. 
  • Fed's QE3 launch is going to add a lot of buying power to this market and drive more people out of interest-bearing assets and into equities in search of some kind of return. 
  • Going back years, there really is little in the way of resistance for the markets until it tests 1500.
  • Upward trend-line off of the 6/4 lows has rising support at 1421
  • One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
  • If another sell-off were to ensue, watch for a break and close below 1396 for a new lower-low in the market.  

My Opinions & Trades:

  • Sold WYNN at $114.90 from 107.47 for a 6.9% gain. 
  • Re-entered later that afternoon again WYNN at $115.42. 
  • Bought GRPN at $4.88
  • Shorted INVN at $12.14
  • Bought TTM at $25.50.0
  • Track my portfolio RealTime here. 

Charts:

SP 500 Market Analysis 10-01-12

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ryan1Ryan (@shareplanner) specializes in swing trading strategies and is the founder of SharePlanner which he created to help and teach others on how to trade stocks better using multiple approaches and time frames. Each day you can count on Ryan to provide his trading advice as well as transparency in every trade that he makes. Ryan Mallory resides in Central Florida with a wife of seven years as well as one lively son. More >>

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