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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:

S and P 500 Market Analysis 11-05-12

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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. More >>

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