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Pre-market update (updated 4:30am eastern):

  • Europe is trading 1.1% higher.
  • Asian markets trading 0.4% higher. 
  • US futures are trading moderately higher ahead of the bell.

Economic reports due out (all times are eastern): Employment Situation (8:30am), Consumer Credit (3pm)

Technical Outlook (SPX):

  • Strength in the market yesterday took us above minor resistance that was found at 1458-9. 
  • A push above 1465, and ideally above 1474, would be incredibly bullish, and likely lead to additional squeezing of the bears
  • This would also create a 'higher-high' for the market which would be extremely important and pave the way for a test of 1500. 
  • Quickly approaching overbought conditions in the short-term, but not quite there yet. 
  • Failure to make a new higher in the near-term, would be indicative of a topping pattern in the broader market. 
  • Bear-flag pattern that had been forming on the daily of the SPX is null and void at this point. 
  • We have a 10-20-day moving average crossover to the downside. Last time we saw this was in early September, and it marked a short-term bottom and subsequently bounced and sent the market nearly 80 points higher. 
  • Volume has been relatively average, maybe slightly below, but nothing unusual. 
  • Taking a look at the weekly chart of SPX, the conditions look very healthy with no signs of a near-term breakdown. 
  • For the bulls to build confidence among investors, there needs to be less of the intraday sell-offs. And the bears, if they really want this market to push lower, they need to take advantage of the intraday weakness it continues to get handed. 
  • VIX is trading below 15.
  • 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. 
  • Upward trend-line off of the 6/4 lows has rising support at 1428
  • 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:

  • Covered my short position in ACTVE at $11.56 from 12.17 for a 5% gain. 
  • Day-Traded ATRS $4.03 from $4.00 for a 0.8% gain
  • Day-Traded BGCP 5.13 from 5.09 for a 0.8% gain (coincidence)
  • Remain long $WYNN at $115.42, TTM at $25.50, VZ at $45.68, SHLD at $54.48. 
  • Stop-loss tightened to $25.90 for TTM.
  • Stop-loss tightened to $45.80 for VZ.
  • Track my portfolio RealTime here.

Charts:

SP 500 Market Analysis 10-04-12

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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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