Pre-market update (updated 7:00am eastern):

• Europe is trading mixed.   
• Asian markets traded mixed as well. 
• US futures are slightly higher. 

Economic reports due out (all times are eastern): Veteran’s Day – Banks closed. 

Technical Outlook (SPX):

• Initially, Friday’s action saw a respectable amount of buying take place. During the Obama speech on the fiscal cliff, the market quickly sold-off. 
• Price remains in the downward channel, but still below the 200-day moving average. 
• Short-term the market is back into oversold conditions. 
• Any bounce that we get here, is likely to take us northward of 1405-1415 on the SPX. At that point, we should see some short-term resistance kick in and prove problematic for the markets. 
• Price remains outside of the lower Bollinger Band for the second straight day. 
• Back in October we traded outside of the lower bollinger band and remained out there for two straight days, before bouncing back to the 20-day moving average. 
• Biggest wave of selling that we’ve seen since bouncing off of the 6/4 lows.
• A lower-low was established at 1403 as well as a previous lower-high. All bearish developments of an established downtrend. 
• Last time we broke through the 200-day SMA, it led to a major sell-off in August 2011 that lasted through early October of that same year. 
• The 30-minute chart also validates the daily chart with the well-defined downtrend that is in place. 
• Divergence in the VIX yesterday as it closed lower on the day at 18.48. The lack of enthusiasm by the VIX during last week’s sell-off could be a warning sign for bears. 

My Opinions & Trades:

• Shorted INVN at $11.31. 
• Remain short SODA at $35.69, short LULU at $70.00, short CAKE at $33.26.
• May consider closing 1 of my 3 short positions this morning if the market continues moving lower. 

Chart for SPX: