Pre-market update (updated 7:00am eastern):
- Europe is trading mixed.
- Asian markets traded mixed as well.
- US futures are slightly higher.
Economic reports due out (all times are eastern): Veteran's Day - Banks closed.
Technical Outlook (SPX):
- Initially, Friday's action saw a respectable amount of buying take place. During the Obama speech on the fiscal cliff, the market quickly sold-off.
- Price remains in the downward channel, but still below the 200-day moving average.
- Short-term the market is back into oversold conditions.
- Any bounce that we get here, is likely to take us northward of 1405-1415 on the SPX. At that point, we should see some short-term resistance kick in and prove problematic for the markets.
- Price remains outside of the lower Bollinger Band for the second straight day.
- Back in October we traded outside of the lower bollinger band and remained out there for two straight days, before bouncing back to the 20-day moving average.
- Biggest wave of selling that we've seen since bouncing off of the 6/4 lows.
- A lower-low was established at 1403 as well as a previous lower-high. All bearish developments of an established downtrend.
- Last time we broke through the 200-day SMA, it led to a major sell-off in August 2011 that lasted through early October of that same year.
- The 30-minute chart also validates the daily chart with the well-defined downtrend that is in place.
- Divergence in the VIX yesterday as it closed lower on the day at 18.48. The lack of enthusiasm by the VIX during last week's sell-off could be a warning sign for bears.
My Opinions & Trades:
- Shorted INVN at $11.31.
- Remain short SODA at $35.69, short LULU at $70.00, short CAKE at $33.26.
- May consider closing 1 of my 3 short positions this morning if the market continues moving lower.
Chart for SPX: