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Pre-market update (updated 9am eastern):

  • Europe is trading mixed/flat. 
  • Asian markets traded mixed/flat. 
  • US futures are trading significantly higher.  

Economic reports due out (all times are eastern): Dallas Fed Manufacturing Survey (10:30am), Farm Prices (3pm)

Technical Outlook (SPX):

  • SPX finished lower on Friday for the fifth straight day and for the six time in the last seven sessions. 
  • Fair value for the market is significantly off this morning after a major drop in after hours trading on Friday due to a breakdown in the Fiscal Cliff talks. Fair value is about 12 points lower than where we closed at. 
  • We are likely to test at some point the lower Bollinger Band on SPX. Often times we will repeatedly test this level before actually bouncing. 
  • We could see a test of the 200 day moving average. There hasn't been anything significant about this moving average over the past year in terms of support/resistance so I wouldn't expect much of it today or going forward. 
  • The S&P is going to finish the year in positive territory and likely in excess of 10%. 
  • Expect light volume levels considering it is New Year's Eve today.
  • SPX is currently trading in oversold territory. 
  • We finished Friday below the critical level of 1411 which thereby ends the trend off of the November lows and creates a new lower-low. 
  • SPX is continuing to price in the strong possibility that we are going over the "Fiscal Cliff" tomorrow.
  • On the flip side, if we are surprised by some kind of mutual agreement between now and the end of the year, expect a major rip higher in the markets - likely  30-40 points on the SPX. 
  • Weekly chart still looks bearish overall with the failure at overhead resistance keeping the market from progressing higher. 
  • The 30-min chart had gone decidedly bearish with a new lower-low and end to the previous uptrend. 
  • VIX finished above 22 - a level that hasn't been reached since June. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 12-31-12

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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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