Pre-market update (updated 9am eastern):

  • Europe is trading 2.5% higher. 
  • Asian markets traded 1.6% higher. 
  • US futures are trading significantly higher nearly 2% above the previous close.   

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Redbook (8am), PMI Manufacturing Index (8:58am), Construction Spending (10am), ISM Manufacturing Index (10am), FOMC Minutes (2pm)

Technical Outlook (SPX):

  • Congress passed through both houses an agreement to avert the fiscal cliff and as a result, futures are rocketing the highest we've seen in a very, very long time. 
  • You also have 
  • The last three years we've seen the first day of the trading year open up by 22 points, 9 points, and 11 points. Of those three times, only once did we finish lower (2010). 
    • Needless to say, there has a undercurrent of buy support at the initial open of the first trading session after New Year's Day. 
  • I'm always skeptical of large gap ups in the market. But a strong news piece like this one can easily sustain the markets. 
  • However, be aware of the possibility for a sell-off after the first hour of trading. Large gap ups though are much easier to sustain than large gap downs. 
  • Be strategic about your trades. Don't chase this market today, just because you feel like you are missing out on a huge move. There are over 220 trading days remaining this year.  You'll have plenty of opportunities for gains. 
  • We a looking at breaking the previous recent  highs at 1448 right at the open today. In doing so, it muddles the technical outlook quite a bit as we  just created a lower low two trading sessions ago. 
  • Monday's price action saw the market reclaim the 10-day, 20-day and 50-day moving averages
  • VIX dropped 21% from 22 down to 18 flat. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 1-01-13


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small-ryan-malloryRyan (@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. More >>

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