• SP 500 Market Analysis 5-31-13

Pre-market update (updated 9am eastern):

  • European markets are trading 0.6% lower. 
  • Asian markets traded 0.3% higher. 
  • US futures are moderately lower ahead of the bell. 

Economic reports due out (all times are eastern): Personal Income and Outlays (8:30am), Consumer Sentiment (9:55am), Farm Prices (3pm)

Technical Outlook (SPX):

  • Yesterday marked the 11th straight day of trading within a consolidated range. 
  • SPX is currently within a 40 point range during this time period that ranges from 1635 up to 1675. 
  • I am using this range to know the markets next move. Until we break out of that range, I expect the opportunities to be limited. 
  • We have tested the 20-day moving average twice over the last four trading sessions and the MA has held each time. 
  • Volume remains steady. 
  • Below the aforementioned 1635, I believe it become necessary to begin adding some short exposure. 
  • VIX has been steadily rising in recent  days. 
  • We are looking at a 7-9 point gap lower this morning, but the market gap downs are extremely difficult for the bears to hold on to beyond the first hour of trading. 
  • That has been the pattern of late…Consolidation…Big Breakout….Consolidation….Big Breakout…. Rinse/repeat.
  • The long-term trend-line off of the February lows sits at 1616 today, and likely safe from the reaches of the market for now.
  • 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:

  • Closed out CVS at $59.06 for a slight 0.1% gain. Wasn’t performing well. 
  • Added APA at $84.95
  • Will look to add 1-2 new positions today if the market can bounce. 
  • Long HLIT at 6.08, HUM at $80.60, AMZN at $267.21, CF at $191.35, LUV at 14.25.
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 5-31-13

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