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:
- No current positions.
- Will look to add 1-2 new positions to the portfolio today as long as the market doesn't reverse itself.
- Here is my real-time swing-trading portfolio and past-performance
Chart for SPX: