Pre-market update (updated 8am eastern):

  • European markets are trading 0.2% lower.
  • Asian markets traded 1.2% higher. 
  • US futures are slightly lower. 

Economic reports due out (all times are eastern): Bernanke Speaks (8am), Chicago Fed National Activity Index (8:30am)

Technical Outlook (SPX):

  • Strong rally on Friday, but I'm not confident that it translates to additional follow through today. 
  • Slight weakness ahead of the bell, so the key for the bulls is to no allow for any new lows after the first hour of trading. If that can happen, it is likely that we can bounce and possibly move back into green territory. 
  • Volume was notably higher on Friday and that has also been the case in general with the market over the last week. 
  • Follow the 10-day moving average, if we can't break that rising support level in the short-term, there is no reason to curb one's long exposure much less take on short positions. 
  • 30-minute chart could be argued that it is overextended, but since the beginning of the month, the uptrend that it has formed is very impressive and consistent.
  • VIX broke recent lows in the short-term which is important for the bulls considering  how divergent the VIX has been with the overall market movement. 
  • I'm not to concerned about this market at this point. I think you want to keep stops tight in case of reversal, but not be afraid to add new opportunities where they exist. 
  • Eventually the equities bubble we are in right now will burst, but until then, you have no choice but to trade to the long side. 
  • I do have big reservations about whether this market can truly get up to 1700 as quickly as it is trying to do. It has gone straight up since crossing 1600, and bulls have become gluttons in their market outlook. 
  • Traders will point at the fact that we are overbought but we have been since April - move on, nothing to see there. 
  • We have traded above the 10-day moving average for 19 straight sessions, which is a great sign of strength. 
  • 17 out of the last 21 sessions has resulted in a bullish move for the SPX. Futile to try to call tops on this market right now... let the price action come to you. 
  • Essentially, the market has previously been working off overbought conditions via intraday pullbacks. 
  • If it were up to me, I'd like to see the SPX pullback over multiple days to the 1600 level. 
  • We are up seven straight months, the last time we saw such a rally was when the market bottomed in 2009. 
  • 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. 
  • We haven't seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

  • Sold DO on Friday at $72.83 for 2.6% gain. 
  • Added HOS to replace DOS at $52.97. 
  • Will look to tighten up my positions even more today and their stop-losses. 
  • May add another long positions, but would like to swap it out for one of the lower performing stocks in the portfolio.  
  • Remain Long RLGY at $48.49, JCI at $35.22, GRA at $79.03, WOOF at $24.40, DG at $52.75, CMG at $374.07, AAP 86.07.
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SPX Market Analysis 05-20-13

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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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