Pre-market update:

• Asian markets traded -1.1% lower.
• European markets are trading 0.6% lower. 
• US futures are trading 0.4% lower ahead of the market open. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7), Atlanta Fed Business Inflation Expectations (10), Treasury Budget (2)

Technical Outlook (SPX):

• Yesterday represented a nice buy-the-dip session that took price action back near the highs of the day. 
• The consolidation that I continue to mention has lasted since 10/21, and unless 1740 or 1775, the consolidation will continue. 
• Volume picked up some from Monday’s low showing, but still below average nonetheless. 
• SPX back into overbought territory. 
• 1740 will continue to be my key support level to watch today. 
• Secondary support will be the rising 20-day moving average as the bulls bought the dip off of that MA last week. 
• VIX bumped up to 12.82 yesterday. 
• It is key for the SPX to break to new highs in the next 1-2 days otherwise, Friday’s move becomes more of a dead cat bounce. 
• 30-minute chart of SPX is back to consolidation patterns. 
• 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:

• Sold JWN at $62.29 for a 2.7% gain. 
• Added two new longs and one new short. 
• 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 80% long / 10% short / 10% cash.  
• Current Longs: ALKS at 35.49, GES at 31.55, CHS at 17.30, MOS at 47.77, PAY at 24.97, GPC at 81.40.
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Chart for SPX: