Pre-market update (updated 9am eastern):

• European markets are trading -1.1% lower.
• Asian markets traded 0.7% higher.
• US futures are trading moderately lower ahead of the opening bell.

Economic reports due out (all times are eastern): MBA Purchase Applications, Pending Home Sales Index (10am), EIA Petroleum Status Report (10:30am), Farm Prices (3pm)

Technical Outlook (SPX):

• SPX nearly broke out of consolidation yesterday, just finishing a fraction of a  point within the boxed in area outlined below. 
• Today we are faced with the prospect of reversing to the downside with a large gap down. 
• These large gap downs have been problematic for the bulls to maintain. They often lead to the dip buyers trying to fill the gap after the first hour of trading. 
• We’ve pulled back off of overbought conditions quite nicely. 
• Consolidation continues to be the theme on the daily. We need to see either a break to the upside of 1563, or a break to the downside of 1538 to determine the market’s next move. 
• Volume continues to remain steady over the past week and a half of trading. 
• Dead-cat bounces, like some may determine Friday to be, have really been non-existent of late. Once they bounce, they just keep going higher, no true reversals that takes us lower than the previous lows reached. 
• We have seen the volume flow in much stronger on the sell-offs then on the days when the market rallies.
• VIX dropped back into the 12’s after yesterday’s rally. 
• I don’t recommend using market bounces as an opportunity to reload your short positions at this time. 
• Ideally, we are still in need of a more sustained pullback to 1500-1510 level simply for the reason, that it would once again bring stocks back to a place with more ideal setups and opportunities for trading. 
• Also the amount of margin being used to buy stocks are at levels that historically have led to notable reversals in the market. 
• Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
• We haven’t seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

• Added BWLD yesterday at $86.53
• Remain Long SLV at $27.97, SRPT at $33.07, GG at $33.55, HOS at $44.92.
• Remaining patient at these elevated price levels – not going to force position that aren’t there. 
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: