by Ryan Mallory

Pre-market update (updated 8:00am eastern):

• Europe is 0.5% higher. 
• Asian markets traded -0.1% lower. 
• US futures are slightly higher ahead of the open. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Treasury STRIPS (3pm)

Technical Outlook (SPX):

• It's election day, and like yesterday, don't expect much out of this market. 
• I think this small gap up this morning is setting up for a gap-and-crap day of action. I doubt the early morning strength holds. 
• We tested the trend-line off of the 6/4 lows yet again yesterday and saw the bulls come in and support the market as a result. 
• Bear-flag forming on the daily SPY - once that trend-line breaks the bear-flag is confirmed and the downtrend resumes. 
• SPX continues to struggle breaking above and away from the 8-day EMA.
• Volume was  light which is no surprise considering that traders don't' want to get ahead of this market. 
• 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 1410. 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. 
• 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 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. 

My Opinions & Trades:

• Long JRCC at $4.57.
• Went Short CAKE at $33.50.
• Will cover ESRX at the open today. 
• Remain long AGU at $106.23. 
• Remain Short ESRX at 61.51

Chart for SPX: