Pre-market update (updated 8:00am eastern):
- Europe is trading -0.8% lower. .
- Asian markets traded -0.2% lower.
- US futures are flat ahead of the open.
Economic reports due out (all times are eastern): ISM Non-Manufacturing Index (10am)
Technical Outlook (SPX):
- On Friday, the market delivered a rather bearish performance after having a solid open, resulted in a massive bearish engulfing pattern on the SPY.
- It's worth noting that the reversal on Friday occurred right at the retest of the 20 and 50-day moving averages. Also happens that the 20-day moving average is dipping below the 50-day moving average for the first time since 7/6/12.
- A key price level for the bears is 1403 (recent lower-lows).
- Uptrend off of the 6/4 lows finds support at 1409. The last two attempts testing this trend line have held.
- Over the past three weeks we've seen a slight uptick in the overall volume of the market.
- Price also reversed on Friday where the confirmation of the triple top confirmed (resistance).
- If conditions are to get bearish, it can't do so until it breaks this 1400 level.
- 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 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.
My Opinions & Trades:
- Covered MCP short at $9.95 from $10.34 for a 3.8% gain.
- Remain long AGU at $106.23.
- Remain Short ESRX at 61.51
Chart for SPX: