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

  • Europe is trading 0.3% higher. 
  • Asian markets traded mixed.
  • US futures are trading moderately higher. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), PMI Manufacturing Index Flash (8:58am), New Home Sales (10am), EIA Petroleum Status Report (10:30am), FOMC Statement (2:15pm)

Technical Outlook (SPX):

  • Major sell-off in the SPX yesterday, which has taken price action well below the 50-day moving average. 
  • A bounce here becomes all the more likely as price on SPX is well below the lower bollinger band. Which is something we haven't seen since the extended sell-off in May. 
  • We also broke below the critical 1425 support level. This creates an obvious lower-low in the market, but also break down out of current price channel. Very bearish
  • Market shows signs that it is short-term oversold. 
  • Volume has been 'average' over the past couple of days. 
  • Next support level lies at 1400. 
  • Weekly chart also supports a breakdown in the previous channel, and end to its longer-term uptrend off of the June lows. 
  • Watch the trend-line on the weekly chart by drawing a trend-line off of the October 2011 lows. This trend-line breaks at 1398-1400 as well. 
  • 30-minute chart shows a beautiful triple top that has confirmed. 
  • Don't forget, there is a FOMC statement, which makes things even more interesting since it is the last one before the election. 
  • VIX is a shade below 19.
  • 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:

  • Closed out my short positions
  • Covered UBRN at $35.94 for a 1.1% gain. 
  • Covered CAKE at $33.75 for a 0.7% gain.
  • Covered EXPD at $36 for a -1% loss. 
  • Sold WLT at $37.89 for a -3.7% loss. 
  • Remain long AGU at $106.23. 
  • Track my portfolio RealTime here.

Chart for SPX:

SP 500 Market Analysis 10-24-12

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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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