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Pre-market update (updated 8:30am eastern):

  • Europe is trading 0.4% higher. 
  • Asian markets traded -1.6% lower. 
  • US futures are moderately higher. 

Economic reports due out (all times are eastern): International Trade (8:30am), Jobless Claims (8:30am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

  • Biggest sell-off that we've seen since bouncing off of the 6/4 lows (last 30+ point sell-off was on 6/1). 
  • Price action went all the way down to the lower bollinger-band before closing on the day.
  • Bear-flag confirmation as we had talked about in yesterday's Trading Plan occurred at 1410. 
  • Price support levels at 1400 were decimated yesterday. 
  • A lower-low was established at 1403 as well as a previous lower-high. All bearish developments of an established downtrend. 
  • The 200-day moving average is definitely in play today. A break of 1380, and you can say this market's conditions become very dire. 
  • Last test of the 200-day moving average came on 6/4 where the market ended up bouncing handedly and forming a bottom as well, then rallying for the next 5 months. 
  • Yesterday's volume was the highest that we'd seen since 5/18/12. 
  • The fact that we did not see any kind of rally yesterday, despite the huge gap-down, was an obvious sign of a shift of market sentiment yesterday. 
  • Weekly chart also supports a breakdown in the previous channel.
  • VIX at 19. 

My Opinions & Trades:

  • Shorted SODA at $35.69.
  • Will look to add new shorts to the portfolio today. 

Chart for SPX:

S and P 500 Market Analysis 11-08-12

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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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