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

  • Europe is -0.6% lower. 
  • Asian markets traded +0.5% higher. 
  • US futures are down over 1% ahead of the open. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am), Consumer Credit (3pm)

Technical Outlook (SPX):

  • Stocks rallied hard yesterday but failed to get above the 50-day moving average and remains fixed in a bear-flag pattern. 
  • Stocks look to sell-off today, showing a huge gap ahead of the open. A potential bearish kicker that could lead to the next market downturn. 
  • Presidential election now off the books, market can now move beyond uncertainty in regards to who will be the next leader of the free world. 
  • Watch the uptrend off of the 6/4 lows, because if that breaks, it simultaneously will beak the bear-flag as well. 
  • Remember as well, that bears have difficulty often times with huge gap downs, often times resulting in a push higher after the first hour of trading. 
  • 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).
  • 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 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. 

My Opinions & Trades:

  • Sold JRCC at $4.75 from $4.57 for a 3.9% gain. Sold due to earnings coming out. 
  • Sold AGU yesterday at $107.11 from 106.23 for a 0.8% gain for the same reason. 
  • Covered ESRX at 55.40 from 61.51 for a 9% gain. 
  • Currently no positions in the portfolio. 

Chart for SPX:

S and P 500 Market Analysis 11-07-12

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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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