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Pre-market update (updated 9am eastern):

  • Europe is trading mixed.
  • Asian markets traded in a broad range from -0.7% up to +0.7%
  • US futures are slightly higher ahead of the opening bell. 

Economic reports due out (all times are eastern): None

Technical Outlook (SPX):

  • Triple top now forming on the SPX, as Friday saw a very hard sell-off. 
  • Held the 50-day moving average, which last few times we have tested this price level, has resulted in a market bounce. 
  • Friday's sell-off practically wiped out all of the week's gains. 
  • Despite the sell-off, we still remain in a sideways channel, that has yet to provide  us with a signal to the up or down side. 
  • Volume was notably higher on Friday, during the sell-off, though this could be attributed to options expiration as well. 
  • A break below 1425 would be significant, as long as we close below that level. 
  • To the upside, the bulls needs to break 1464
  • Slight increases in the volume level over the last four days consecutively. 
  • 30 minute chart looks extremely choppy, but mirror image of daily price action. 
  • Multiple ways to look at this market... I'll detail both perspectives
  • Considering the larger uptrend that we were in from the 6/4 lows, one could consider this to be a developing bull-flag before moving higher. 
  • I'd recommend not drawing a conclusion on either scenario - let the market do that eventually.
  • VIX spiked the most it has in a very long time - over 13% to above 17. 
  • 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. 
  • 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

My Opinions & Trades:

Charts:

SP 500 Market Analysis 10-22-12

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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. More >>

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