Pre-market update (updated 9am eastern):
- European markets are trading 0.6% higher.
- Asian markets traded 0.9% higher.
- US futures are trading slightly higher ahead of the opening bell.
Economic reports due out (all times are eastern): Chicago Fed National Activity Index (8:30am), Dallas Fed Manufacturing Survey (10:30am)
Technical Outlook (SPX):
- A nice rebound from the previous day's selling, which looks to continue into today.
- Consolidation continues to be the theme on the daily. We need to see either a break to the upside of 1563, or a break to the downside of 1538 to determine the market's next move.
- Recent consolidation has also helped with the market's overbought readings by pulling off of them some.
- Volume continues to remain steady over the past week and a half of trading.
- Dead-cat bounces, like some may determine Friday to be, have really been non-existent of late. Once they bounce, they just keep going higher, no true reversals that takes us lower than the previous lows reached.
- We have seen the volume flow in much stronger on the sell-offs then on the days when the market rallies.
- VIX is hovering in the 13's.
- I don't recommend using market bounces as an opportunity to reload your short positions at this time.
- Ideally, we are still in need of a more sustained pullback to 1500-1510 level simply for the reason, that it would once again bring stocks back to a place with more ideal setups and opportunities for trading.
- Also the amount of margin being used to buy stocks are at levels that historically have led to notable reversals in the market.
- Both channels (July October 2012) and the price channel we are currently in are very similar in nature.
- We haven't seen a market pullback in excess of 4% since October/November time-frame.
My Opinions & Trades:
- No new positions added on Friday.
- Remain Long SLV at $27.97, SRPT at $33.07, HOV at $6.19, GG at $33.55
- Remaining patient at these elevated price levels - not going to force position that aren't there.
- Here is my real-time swing-trading portfolio and past-performance
Chart for SPX: