Pre-market update (updated 9am eastern):
- European markets are trading 0.4% higher.
- Asian markets traded 1.9% higher.
- US futures are slightly higher ahead of the bell.
Economic reports due out (all times are eastern): MBA Purchase Applications (7am), Durable Goods Orders (8:30am), EIA Petroleum Status Report (10:30am)
Technical Outlook (SPX):
- The bounce continued on Tuesday, putting in its best performance of the past three sessions.
- The SPX has rallied over 42 points off the lows established on Thursday last week.
- Fake tweet by the AP about an explosion at the White House and injury to the President saw the SPX drop a quick 10+ points in a matter of minutes, then rebound completely after it became known it was fake.
- While we could be due for a pullback, the possibility that we rally yet again today is very real. Rallies after a respectable sell-off tends to establish new highs and squeeze the bears more and more each time.
- 1538 remains the key level for the bears to push this market below, while SPX managed to break the short-term resistance of 1574 yesterday that likely clears the way for a retest of all-time highs.
- SPX well above its 10 & 20-day moving averages now.
- VIX settled in under 14.
- Markets don't care about the economy. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up.
- 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:
Chart for SPX: