Pre-market update:

• Asian markets traded 0.7% lower.
• European markets are trading 0.7% lower. 
• US futures are trading 0.3% lower ahead of the market open. 
  

Economic reports due out (all times are eastern): Employment Situation (8:30), Personal Income and Outlays (8:30), Consumer Sentiment (9:55), Bernanke Speaks (3:30).

Technical Outlook (SPX):

• SPX broke out of the 9-day consolidation pattern and now set to test the pivotal 1740 level of the SPX. 
• Notice how despite breaking the 10-day moving average, it found support at the 20-day moving average. That will be a key level to watch going forward. 
• Yesterday’s action was enough bearish action to put this market rally in jeopardy of a pullback like what we saw back in June, August, and September. 
• But I’d be careful about trying to get short now, rather than waiting for 1740 to break first, preferably it needs to be a closing price below 1740. Intraday doesn’t mean much. 
• Huge pick up in volume yesterday, and on the SPY it was almost double what we saw any time in the last three days. 
• SPX well off of overbought levels. 
• 30- minute chart on SPX shows a double top formed and confirmed. 
• VIX spiked 10% to 13.91. 
• Don’t count out the dip-buyers. 
• 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:

• Will look to add 1-2 new positions today as long as SPX can stay above 1740. 
• Wait at least an hour after the market opens before considering a new position today. 
• Currently 50% long / 50% cash.  
• Will strongly consider adding 1-2 new long positions today. 
• Current Longs: ALKS at 35.49, GES at 31.55, CHS at 17.30 and JOY at 57.36, JWN at 60.66.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: