Pre-market update (updated 7am eastern):
- Europe is trading 0.7% higher.
- Asian markets traded in a wide range from -1.2% up to +0.6%.
- US futures are moderately higher ahead of the open.
Economic reports due out (all times are eastern): PMI Manufacturing Index (8:58am), ISM Manufacturing Index (10am), Construction Spending (10am)
Technical Outlook (SPX):
- Another day of consolidation below the 50-day moving average on SPX.
- Most importantly on the price action is that it is not being rejected at the 50-day MA - just settling below it for now.
- Today's gap open should put price action right at, or above the moving average.
- Volume was strong on Friday, but most likely due to end of month window dressing.
- Stocks remain overbought in general and on the SPX. This can last a while, and does not necessarily mean that a pullback is looming.
- Ideally for the bulls, if price action can close at or above 1429, the downtrend off of the September highs would be officially done and over with, as a new higher high would be established for the first time.
- Over the last 10 trading sessions, the market has rallied strong and not provided a much needed pullback/lhigher-low.
- First days of the trading month tend to be overly bullish. Expect the same today.
- Note the support at the 8-day exponential moving average for this market. Rising support is currently at 1404.
- Next level of resistance rests at 1437.
- Fiscal Cliff discussions continues to dominate the news.
- SharePlanner Reversal Indicator shows a strong possibility for a Santa Rally
- SPX currently has recaptured the 10, 20, and 200-day moving averages.
- VIX dropped to 15.
My Opinions & Trades:
Chart for SPX: