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

  • Europe is trading mix from -0.2% up to +0.6%. 
  • Asian markets traded 0.9% higher. 
  • US futures are trading moderately higher. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), Employment Cost Index (8:30am), Treasury Refunding Announcement (9am), Chicago PMI (9:45am), Farm Prices (3pm)

Technical Outlook (SPX):

  • After being closed for four days (counting the normal weekend), market action today could be very unpredictable. 
  • On  Friday, SPX had a perfect test of the trend-line off of the October 2011 lows. Today that support rests at 1404-5
  • The price range over the last four days of trading on the SPY has consolidated nicely. A move above $142.10, and things should get more bullish. 
  • With the confirmed triple-top in place on SPX, any rally that we get today, should face resistance at 1425. 
  • Volume  has steadily increased over the last two trading sessions. 
  • Short-term we are oversold, and no doubt ready for a bounce. Sometimes, it can take a lot longer than you think to have happen. 
  • 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 is showing some accumulation/channeling at the lows of the recent sell-off. 
  • VIX is below 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:

Chart for SPX:

SP 500 Market Analysis 10-31-12

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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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