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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:

S and P 500 Market Analysis 11-12-12

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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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