Pre-market update (updated 8:30am eastern):

  • European markets are trading 0.1% higher.
  • Asian markets traded 0.3% higher.
  • US futures are slightly higher.

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), Existing Home Sales (10am), Bernanke speaks (10am), EIA Petroleum Report (10:30am), FOMC Minutes (2pm)

Technical Outlook (SPX):

  • We finished higher yet again yesterday, however, the action falls along the lines of the consolidation argument I made earlier this week. 
  • You have a trend-line that is much steeper and short term off of the April lows, that lends rising support at 1645.. 
  • Along those same lines, the 10-day moving average continues to be an excellent gauge for determining short-term market strength, as long as price manages to stay above it, the market undoubtedly remains bullish. 
  • A bearish divergence yesterday to take note of in the VIX as it rose nearly 3% despite the market moving higher as well. This has become more common place in the market of late. 
  • 30 minute chart is starting to look like a possible double top is forming. 
  • I think that we are likely to see more consolidation this week, as there is little in the way of news that can affect the market's outlook. 
  • Drawing a Fibonacci retracement on the most recent market rally, from the April lows, has a 50% retracement at 1604. A 38.2% retracement would be a 1620. 
  • My biggest concern, and the reason why I think we will ultimately see some consolidation here, is how far removed the SPX is from the rising trend line off of the November lows. 
  • 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 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 WOOF at 24.72 for a 1.3% gain yesterday. 
  • Sold AAP at $88.67 for a 3.0% gain yesterday. 
  • Bought PCYC at $82.54 yesterday. 
  • Bought FTR at $4.35 yesterday. 
  • I'm looking to tighten my stops in numerous positions today. 
  • Sitting on over 30% gains in the portfolio. 
  • Remain Long RLGY at 48.49, JCI at 35.22, GRA at 79.03, DG at 52.75, CMG at 374.07, HOS 52.97.
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 5-22-13

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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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