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: