Pre-market update:

  • Asian markets traded 1.0% higher. 
  • European markets are trading 0.3% higher.
  • US futures are trading flat ahead of the market open. 

Economic reports due out (all times are eastern): 
MBA Purchase Applications (7), EIA Petroleum Status (10:30), Treasury Budget (2)

Technical Outlook (SPX):

  • SPX rallied for the fourth straight day and 83 points in that time span. 
  • Stochastics are overbought yet again. 
  • At this point, with major levels of resistance cleared, the next milestone for the bulls will be to make new all-time closing highs. 
  • The byproduct of the last four days has been a major short squeeze where the bears overloaded their positions with short positions, only to have to cover those positions at a much higher price. 
  • The rally that we've see over the last four days goes well beyond a dead cat bounce - the bulls have regained control of the markets and have survived key moments such as the dismal employment number and the testimony of Janet Yellen yesterday. 
  • VIX all the way back down to 14.51.
  • Volume returned back to average levels. 
  • SPX 30-minute chart is extremely over extended after massive move off of last week's lows. 
  • These rallies off of significant pullbacks like we have seen over the past week of trading can actually go higher than one would expect, and can rally for 2-3 weeks without any significant selling taking place. 
  • The biggest technical stronghold is the strength SPX found from the trend line that started off of the August '13 lows. 
  • Markets don't care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 

My Opinions & Trades:

  • Closed out BAS at $19.83 yesterday for a 15.6% gain. 
  • Added SWFT yesterday at 22.01.
  • Remain long SPLK at 75.00 and MU at 23.19, BHI at 56.98, BAC at 16.83, ADSK at 52.08, SWFT at 22.01.
  • Will consider 1-2 new positions based on market conditions. 
  • Long 60% / Cash 40% 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 2-12-14

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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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