Pre-market update (updated 8:30am eastern):
- Europe is trading 0.5% higher.
- Asian markets traded 0.5% higher.
- US futures are trading moderately higher.
Economic reports due out (all times are eastern): Durable Goods Orders (8:30am), Jobless Claims (8:30am), Chicago Fed National Activity Index (8:30am), Pending Home Sales (10am), EIA Natural Gas Report (10:30am), Kansas City Fed Manufacturing Index (11am)
Technical Outlook (SPX):
- Despite opening higher, the market quickly gave up those gains, and finished lower for the fourth time in the last five days.
- We remain extended outside the lower Bollinger Band. Back in May, we managed to do this for five straight days. Eventually it leads to a hard snap-back, causing bears to be squeezed.
- There is strength in pre-market trading, but expect for some resistance to kick in at around 1422, which is the underside of the channel that the market broke down and out of this week.
- There's a trend-line off of the 2011 October lows, that would represent rising long-term support, and today's that level sits at 1400.
- We also broke below the critical 1425 support level. This creates an obvious lower-low in the market, but also a break down and out of current price channel. Very bearish.
- Market is short-term oversold.
- Volume has been 'average' over the past few days.
- Price support also exists at 1400.
- Weekly chart also supports a breakdown in the previous channel, and end to its longer-term uptrend off of the June lows.
- 30-minute chart shows a beautiful triple top that has confirmed.
- FOMC Statement was a non-event.
- VIX is above 18.
- 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:
- No new trades to report.
- Remain long AGU at $106.23.
- Track my portfolio RealTime here.
Chart for SPX: