Pre-market update (updated 9am eastern):
- European markets are trading mixed/flat.
- Asian markets traded -0.4% lower.
- US futures are trading slightly higher ahead of the opening bell.
Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Durable Goods Orders (8:30am), Redbook (8:55am), S&P Case-Shiller HPI (9am), New Home Sales (10am), Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am),
Technical Outlook (SPX):
- SPX offered a failed breakout attempt yesterday, after briefly trading outside of 1563 and the recent consolidation we have been stuck in.
- Surprisingly enough, the SPX has traded lower 5 out of the last 7 days. Despite that, the index has not drifted lower one bit.
- With that said, there is a lot of underlying strength in this market, as it has attempted to push lower day after day with no real progress being made on behalf of the bears.
- We've pulled back off of overbought conditions quite nicely.
- 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.
- 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:
- Added HOS yesterday at $44.92.
- Stopped out of HOV for a -2.3% loss.
- Remain Long SLV at $27.97, SRPT at $33.07, 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: