by Ryan Mallory

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

• Europe is trading 0.7% higher. 
• Asian markets traded in a wide range from -1.3% up to +0.8%. 
• US futures are flat ahead of the open. 

Economic reports due out (all times are eastern): Challenger Job-Cut Report (7:30am), ADP Employment Report (8:15am), Jobless Claims (8:30am), Productivity and Costs (8:30am), PMI Manufacturing INdex (8:58am), ISM Manufacturing Index (10am), Consumer Confidence (10am), Construction Spending (10am), EIA Petroleum Status Report (10:30am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

• Another flat day in the market, but saw us once again test the rising trend-line off of the October 2011 lows. Today that support lies at 1409. 
• There is overhead resistance between 1425 and 1432, that the bulls will need to break through, before I can have any optimism towards this market. 
• We are just barely coming out of short-term oversold conditions. Longer-term we are definitively oversold. 
• We have consolidated very tight for four straight days. A sharp move is likely in the coming days. The tight coiling suggests it is to the downside. 
• 1400 has been well defended of late, particularly in the S&P futures overnight. We'll see whether the bears can push price below that level or not. 
• Employment number comes out tomorrow, and will carry much weight towards the U.S. presidential election. We could see a sharp reaction on a significant beat/miss. 
• Triple-top confirmed on the SPX over the past two months. 
• Weekly chart also supports a breakdown in the previous channel, and end to its longer-term uptrend off of the June lows. 
• VIX spiked above 18 yesterday. 
• 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:

• Sold AMZN at 236.09 from $231.34 for a 2.1% gain. 
• Remain long AGU at $106.23. 
• Shorted MCP at  $10.34
• Shorted ESRX at 61.51
• Track my portfolio RealTime here.

Chart for SPX: